LISLE, IL – Navistar International has finalized its strategic alliance with Volkswagen Truck and Bus, which gives the German manufacturer a 16.6% stake in the business.
“This alliance with Volkswagen Truck and Bus marks a significant milestone in our company’s history, and we expect it will create multiple benefits for both companies in both the near and long term,” says Troy Clarke, Navistar’s chairman, president and Chief Executive Officer. Now that the deal has closed, the company will be working quickly to collaborate with its new partner, he said.
The companies’ alliance will involve sharing technology, and is expected to bring a Volkswagen powertrain to North America as early as 2019. Navistar expects business synergies to save US $500 million over the first five years.
“Our newly founded purchasing cooperation will begin work immediately. This puts both partners in a stronger position for the future. The strategic alliance provides Volkswagen Truck & Bus with access to the all-important North American market,” says Andreas Renschler, Chief Executive Officer of Volkswagen Truck and Bus.
The alliance deal closed after the receipt of all necessary regulatory approvals, finalization of agreements pertaining to the procurement joint venture and technology collaboration, and finally, the satisfaction of other customary closing conditions.
With Volkswagen Truck and Bus acquired roughly 16.2 million newly issued shares in Navistar, which equates to a US $256 million investment effective February 28.
Volkswagen executives Andreas Renschler and Matthias Gründle will join Navistar’s board of directors as part of the new alliance.
The procurement venture is made up of representatives from both companies who will work together to combine the demand of five brands including Volkswagen Truck & Bus’s Scania, MAN, and Volkswagen Caminhões e Ônibus, as well as Navistar’s International and IC Bus brands.
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