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NewsTrucking

Navistar takeover intrigue rises with TRATON leadership shakeup

Architect of TRATON global champion push flashed hot and cold on full acquisition

If German truck holding company TRATON Group (ETR: 8TRA) completes its unsolicited bid to buy Navistar International Corp. (NYSE: NAV), new leaders will run the combined company with TRATON CEO Andreas Renschler departing.

TRATON announced on Tuesday, July 8, that takeover architect Rentschler is departing and handing the CEO role to Matthias Gründler, the former chief financial officer of the Munich-based truck holding company of Volkswagen AG. 

Navistar named Persio Lisboa to succeed Troy Clarke as president and CEO on June 26.  

“From a personal point of view there is no better point in time to leave and to hand over the business to a very experienced successor,” the departing Renschler said in a letter to employees quoted by Bloomberg. 

TRATON’s Global Champion Strategy

On January 30, TRATON offered $2.9 billion in cash for the 83% of Navistar shares it does not already own. Acquiring the fourth-largest truck maker in North America would clear the way for TRATON to compete with major rivals Daimler AG and AB Volvo in the U.S. market. 

Renschler often spoke of TRATON’s “Global Champion Strategy.” VW created TRATON, composed of the MAN, Scania and Volkswagen Caminhões e Ônibus brands, in June 2018. It began trading as a public company in Germany and Sweden a year later.

TRATON also has a global procurement joint venture Japan’s Hino Trucks Ltd., which is 50.1% owned by Toyota Motor Corp.

TRATON’s public offering, shepherded by Renschler, led to speculation of an imminent takeover of Navistar. But Rentschler, a former Daimler Truck executive who oversaw the growth of Daimler Trucks North America, flashed hot and cold on expanding a powertrain and purchasing partnership into full ownership of Navistar.  

VW Truck & Bus Group purchased 16.6% of Navistar in September 2016 for $256 million.

Navistar state of play

Navistar did not respond to a request for comment on Renschler’s departure. As recently as the North American Commercial Vehicle show in October 2019, Renschler appeared with Clarke and Lisboa, who announced a memorandum of understanding to allow Scania to sell mining equipment in Canada through International dealers.

“It should not impact the Navistar deal partly driven by current CFO (Christian Schulz) and Mr Gründler,” Jefferies Equities Research analyst Himanshu Agarwal said in an investor note Wednesday. “We believe TRATON is at the beginning of a multi-year transformation through cost restructuring and [the Navistar] transaction eventually leading to a higher free-float.”

Navistar shares traded 2.8% higher Wednesday at $27.93, below TRATON’s offer of $35 per share. 

Stephen Volkmann, who covers Navistar for Jefferies, told FreightWaves on June 26 that the longer TRATON waits to complete a deal for Navistar “the further along Navistar will be in its recovery — which may boost the price at which they are willing to sell.”

Clarke, who led Navistar since 2013, took on the newly created role of executive chairman to oversee discussions with TRATON. Other than confirming that it is evaluating TRATON’s offer, Navistar deflects questions on the issue.

“They have said they will not negotiate in public so we haven’t had any updates on that,” Volkmann said June 26. “It’s an interesting process.”

Click for more FreightWaves articles by Alan Adler.

Related stories:

TRATON makes $2.9 billion unsolicited bid to buy rest of Navistar

Navistar taps Persio Lisboa as next CEO

TRATON boss says VW truck unit “not interested” in acquiring Navistar

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Alan Adler

Alan Adler is a Detroit-based award-winning journalist who worked for The Associated Press, the Detroit Free Press and most recently as Detroit Bureau Chief for Trucks.com. He also spent two decades in domestic and international media relations and executive communications with General Motors.
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