Volkswagen Could Purchase Stake in Navistar
June 11, 2012
Volkswagon is considering whether to purchase stake in Navistar, media outlets report
The initial report came from the Financial Times Deutschland on Sunday. So far, media outlets say Volkswagen has not commented.
Volkswagen does not have a strong presence in the U.S. commercial vehicle market, but a stake in Navistar would put the German auto maker in a better position to compete with Daimler Trucks, currently the biggest global commercial vehicle manufacturer.
"European trucks are built with the cab over engine so synergies are indeed harder to achieve with a U.S. truck maker, but VW would at least gain control over a sales and distribution network in addition to the International brand," an industry source not involved in any talks told Reuters.
Recently, Navistar reported worse-than-expected financial results for the second quarter, and on June 7, the company's shares dropped 14%, the most since Aug. 8, to $24.11. The company also announced top-level management changes.
The following day, activist investor Carl Icahn bought 883,200 of the company's shares at $22.44 per share, raising his stake in Navistar from 10.6% to 12%. Icahn's actions raised share price to $28.69. Related Stories:6/8/2012 Navistar Reports Worse-Than-Expected Results, Makes Management Changes