Volkswagen's TRATON SE truck unit late Thursday offered $2.9 billion, or $35 a share in cash, for the 83% of Navistar International Corp. (NYSE: NAV) it does not already own.
The news, first reported by Bloomberg, broke after U.S. markets closed. After-hours trading in Navistar, which makes International-branded medium- and heavy-duty trucks, sent the stock rocketing 47% higher to $35.60, above TRATON's offer price.
In a statement, Navistar confirmed "an unsolicited proposal" from TRATON and said its board of directors would "carefully review and evaluate the proposal."
Navistar has close and growing cooperation with TRATON, which purchased 17% of Navistar for $256 million in September 2016. The two are integrating purchasing and powertrain operations.
TRATON's Scania brand is getting a foothold in Canada with Navistar's help. The two companies spoke glowingly of their cooperation at the North American Commercial Vehicle show in Atlanta in October 2019.
Navistar advised shareholders to take no action on TRATON's proposal.
"There can be no assurance that any negotiations between Navistar and TRATON regarding this proposal will take place, and if such negotiations do take place, there can be no assurance that any transaction with TRATON will occur or be consummated," Navistar said in a statement.
TRATON is known to desire a presence in the North American heavy-duty market where its main competitors, Daimler AG (OTC: DDAIF) and AB Volvo (OTC: VLVLY), are major players. Navistar, which has largely recovered from an engine emissions issue in the last decade, would be TRATON's entry vehicle. As recently as July 2019, TRATON said it was satisfied with a minority stake in Navistar and technology cooperation.
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