Volkswagen buys 16,6% stake in Navistar

Volkswagen buys 16.6% stake in Navistar, American truck manufacturer, according to analysts is the first step for the spin off of the division of trucks expected next year.

The German group will thus seek to expand its presence in the American market by focusing on activities related to trucks. The two companies have been talking since early 2015, and they reached the agreement for developing new products. 

In a conference call Tuesday, however, Volkswagen Trucks Chief Executive Andreas Renschler didn’t rule out the possibility of an eventual merger with Navistar: “On our way to becoming a global champion all options are open,” he said.

Volkswagen intends to invest $ 256 million, $ 15.76 a share, 12% premium over the closing price of Friday's session. The German company will also have the right to appoint two members of the board of directors of Navistar, which expects to save $ 200 million over five years.

In a statement, Troy Clarke, President and CEO, Navistar, said: "Over the longer term, it is intended to expand the technology options we are able to offer our customers by leveraging the best of both companies."

For now, the deal to share technology and procurement is still subject to regulatory approvals. As of mid-morning Tuesday, Navistar stock was trading at $22.30 a share, up $8.23, or nearly 59 percent.