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

Amid investor speculation of early buyout, Navistar’s shares fall nearly 6.5 percent

Image: Navistar

Navistar International (NYSE:NAV) shares fell nearly 6.5 percent on Wednesday (July 17) after the head of Volkswagen’s (OTCPK:VWAGY) trucking group TRATON SE said it was “not interested” in a full acquisition of the Lisle, Illinois truck manufacturer. 

TRATON CEO Andreas Renschler told the German newspaper Handelsblatt that owning 16.8 percent of Navistar’s stock and controlling two board seats is sufficient.

We are very satisfied with our partnership with Navistar as it is,” Renschler said. “To be honest, many takeovers – even in other industries – are unsuccessful.”

In 2018, Renschler said acquiring Navistar would be a “good idea.”

Navistar did not immediately respond to a request for comment on the report. Navistar’s stock closed at $31.43 on Wednesday. Shares are still up 16 percent since the start of the year.

Been here before

David Leiker, senior research analyst at Robert W. Baird & Co., said TRATON, formerly the Truck & Bus Group of Volkswagen, has made similar comments since paying $256 million in September 2016 for its stake in Navistar.

“In the past, comments suggesting a longer process for acquiring Navistar have created pullbacks in Navistar’s stock, and today is no different,” Leiker wrote in a note to investors. “We firmly believe TRATON will eventually acquire Navistar to maximize the synergies and financial returns from its investment.”

Geographic synergies

TRATON began trading on the Frankfurt Stock Exchange and Nasdaq Stockholm under the ticker 8TRA on June 28. That raised investor speculation that it would add Navistar to its MAN and Scania brands as it pursues Daimler AG (NASDAQ:DMLRY) and Volvo AB (NASDAQ:VLVLY) for global truck leadership.  

TRATON’s core markets are Europe and South America. It reported revenue of 25.9 billion euros in 2018 with truck sales of 233,000 units. North America accounts for only 1.5 percent of TRATON’s vehicle deliveries. It has about 81,000 employees and 29 production and assembly facilities in 17 countries.

Navistar holds about 14 percent of the U.S. market for heavy- and medium-duty trucks. It generated $10.3 billion in revenue during its 2018 fiscal year ending in October 2018.   Navistar’s $3.3 billion market cap is roughly one-quarter of TRATON’s value. The two collaborate on engine technology, the sale of engines and contract manufacturing.

TRATON formed a strategic partnership with Japan’s Hino Motors Ltd. (OTCMKTS: HINOF) in April 2018 to cooperate on conventional, hybrid and electric powertrains, connectivity and autonomous driving systems as well as purchasing and logistics. Toyota Motor Corp. (NYSE:TM) owns 50.1 percent of Hino.  

Investment timing

TRATON’s investment came at a critical time for Navistar. Its market share had cratered because of the defective Maxxforce engine that cost billions in recalls and repairs and damaged the company’s reputation. Navistar recently set aside $158 million to cover a class action and other customer claims.

Since the alliance was formed, Navistar has also benefited from TRATON’s purchasing might.  VW and Navistar said they anticipated five-year savings of $500 million from working together.

“The alliance with TRATON is reducing costs through the procurement joint venture and cost-effective access to next-generation technologies,” Navistar CEO Troy Clarke said on the company’s earnings call June 4.


  1. Sam Simmons

    Wow – did the reporter actually read the interview with Renschler? There was one comment about NAV in response to a question:

    Are the acquisitions – such as the rumored purchase of the US manufacturer Navistar – currently an issue? 
    We are very satisfied with our partnership with Navistar as it is.

    He never said they weren’t interested in pursuing Navistar or that an acquisition was off the table. What CEO is going to say “Yep, we are now going after Navistar” prior to any official offer?

    Also the comment about takeovers being unsuccessful is taken way out of context. It wasn’t a comment related to the potential for buying NAV, but a general observation about acquiring vs partnering.

    Frankly, NAV has sent up major smoke signals that a deal is imminent. Navistar has sold their defense business, defeased their Canadian pension plan, and settled a major lingering liability. Moreover, Gabelli (board seat) picked up a whole bunch of additional shares immediately after announcement that the Traton IPO was back on.

    I highly recommend that anyone interested in the Navistar/Traton combination actually read the interview with Renschler. He rules out nothing.

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Alan Adler

Alan Adler is an award-winning journalist who worked for The Associated Press and the Detroit Free Press. He also spent two decades in domestic and international media relations and executive communications with General Motors.