Navistar Receives $2.9B Buyout Offer From Volkswagen Arm
Zacks Investment Research | Jan 30, 2020 08:32PM ET
Navistar International Corporation (NYSE:NAV) recently announced that it has received an unsolicited proposal from Volkswagen (DE:VOWG_p) AG’s (OTC:VWAGY) subsidiary, TRATON SE, to buy the rest of Navistar in a $2.9-billion or $35 per share bid to forge a significant share of the U.S. heavy-truck market.
Navistar constructs international brand trucks, school buses, defense vehicles and engines. The offer represents a premium of 45% on Navistar's closing price of $24.07 per share as of Jan 30, 2020, bringing its total value at $3.5 billion. Navistar's stock jumped as much as 53% to $36.79 in after-hours trading on the same day.
The proposal will be carefully reviewed and assessed by Navistar's board and advisers. If Navistar accepts the proposal, Volkswagen will acquire it amid its restructuring initiatives.
In September 2016, Volkswagen bought a 16.6% stake in Navistar, which has since risen to 16.8%, fortifying the company’s foothold in the North American market — the largest market for the truck industry.
Further, Navistar and Traton have been collaborating on purchasing and making developments in technology, in order to slash annual costs for both by $200 million a year.
Shares of Navistar have underperformed the Original post
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