Volkswagen Truck & Bus and Navistar are entering into a long-term, strategic alliance based on four pillars
-
1
Equity investment
Volkswagen Truck & Bus will take a 16.6%
equity stake (post-dilution) in Navistar by way of
a capital increase (subject to customary closing
conditions). -
2
Strategic technology and supply cooperation
The two companies intend to enter into definitive
agreements to collaborate on technology for
powertrain systems, as well as other advanced
technologies. -
3
Procurement joint venture
The two companies expect to form a
procurement joint venture to pursue joint
global sourcing opportunities. -
4
Governance
Navistar will add two Volkswagen Truck & Bus
representatives to its Board of Directors at
closing of share issuance. Furthermore, the
parties plan to form a joint Alliance Board to
oversee alliance arrangements.
Volkswagen Truck & Bus equity stake supports the two companies’ alignment and improves Navistar financial flexibility
No. of Navistar common shares issued and outstanding (pre-transaction) |
81.6 mn shares |
No. of new Navistar common shares issued in capital increase |
16.2 mn shares |
Subscription price |
$15.76 |
Implied premium to prevailing market price |
12% |
Cash proceeds for Navistar |
$256 mn |
No. of Navistar common shares issued and outstanding post-capital increase |
97.9 mn shares |
Volkswagen Truck & Bus equity stake in Navistar (post-dilution) |
16.6% |
Expected to close following receipt of certain regulatory approvals, the finalization of the agreements governing the procurement joint venture, and the first contract under the technology and supply framework agreement and other customary closing conditions
Estimated Volkswagen Truck & Bus and Navistar market presence (by region)
Planned technology and supply cooperation and procurement joint venture expected to take advantage of combined scale to deliver high-quality products and significant potential synergies.
Figure 1+2: Figures for FY 2015.
Figure 1: Volkswagen Truck & Bus commercial vehicles figure (sum of Scania and MAN CV )
Figure 3: Total volume calculation just for visualization of synergy potential; both companies will remain independent