Volkswagen Truck Unit Traton, US Navistar Sign Merger Deal

Volkswagen Truck Unit Traton, US Navistar Sign Merger Deal
Traton SE posters are fixed at the entrance to the stock exchange in Frankfurt am Main, western Germany, on June 28, 2019. (Boris Roessler/DPA/AFP via Getty Images)

Volkswagen AG’s truck unit Traton SE said on Saturday it had signed a merger agreement with U.S. truck maker Navistar International Corp in a deal that would extend its reach into North America.

The deal will see Traton acquire all common shares in Navistar at $44.50 per share, excluding the 16.7 percent stake that it already holds, the statement said.

At $44.50 per share, Traton would pay about $3.7 billion for the shares in Navistar it doesn’t already own, valuing the U.S. business as a whole at around $4.4 billion.

The merger would combine the MAN, Scania, and Volkswagen trucks brands with Navistar to create a global manufacturer, at a time when the industry is seeking ways to share the costs of developing low emissions technology.

Navistar did not immediately respond when Reuters contacted it for a comment on Saturday.

In a separate statement, Traton said that the deal will be financed through Volkswagen International Luxemburg S.A and a loan agreement has been concluded.

Traton last month sweetened its takeover bid for Navistar from $43 per share to $44.50 per share.

By Aishwarya Nair