Keep on truckin’

16 Apr 2018 By Liam Proud Follow @liamwardproud

New CEO Herbert Diess is mulling an IPO for its truck unit. It’d be a smoother ride if VW boosts its minority holding in U.S. peer Navistar to a controlling stake. Icahn and two other pushy investors own 40 pct of the $3.9 bln outfit – and are likely to want a hefty premium.

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Volkswagen is open to buying a majority stake in U.S. truck group Navistar International, the German carmaker said on April 16.

"Taking over Navistar) would make sense at some point," said Matthias Gruendler, the finance chief of VW’s truck and bus division.

Andreas Renschler, chief executive of Volkswagen Truck & Bus, said on the same day that the company is cutting costs across its operations. “We want to achieve capital-market readiness in the next 12 months. An IPO is just one of the options,” he said.

VW bought a 16.9 percent stake in Navistar in 2016 and recently struck a strategic partnership with Toyota's Hino Motors as it aims to compete more effectively with global truck market leaders Daimler and Volvo.

U.S. law would require VW to issue a formal takeover bid for Navistar once the German manufacturer raises its stake in the U.S. peer above 17 percent, VW said.

Carl Icahn’s hedge fund, Icahn Associates, owns just under 17 percent of Navistar, according to Thomson Reuters data. Fellow activist investors MHR Fund Management and Gabelli Funds own 16.4 percent and 8.6 percent respectively.

Navistar’s New York-listed shares were up 4.5 percent at $38.69 apiece at 0945 EDT.

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Context News

Volkswagen is open to buying a majority stake in U.S. truck group Navistar International, the German carmaker said on April 16.

"Taking over Navistar) would make sense at some point," said Matthias Gruendler, the finance chief of VW’s truck and bus division.

U.S. law would require VW to issue a formal takeover bid for Navistar once the German manufacturer raises its stake in the U.S. peer above 17 percent, VW said.

Navistar’s New York-listed shares were up 4.5 percent at $38.69 apiece at 0945 EDT.

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