Traton and Navistar have officially entered into a definitive merger agreement after announcing that the companies had reached an agreement for Traton to buy out the remaining shares in Navistar on October 16.

Traton will become the owner of all of the outstanding common shares of Navistar that company does not already own at $44.50 a share. It currently owns 16.7% of the outstanding shares of the OEM’s common stock.

More than three years ago, Traton and Navistar formed a strategic alliance through increased purchasing scale and the integration of new technologies, with this final transaction “building on that success by combining Traton’s strong position in Europe and substantial presence in South America with Navistar’s complementary footprint in North America to create a global company well-positioned to benefit from enhanced brand performance, increased innovation and industry-leading capabilities,” according to a statement from the companies.

“Today’s announcement accelerates our Global Champion Strategy by expanding our reach across key truck markets worldwide, including scale and capabilities to deliver cutting-edge products, technologies and services to our customers,” said Traton CEO Matthias Gründler. “Together, we will have an enhanced ability to meet the demands of new regulations and rapidly developing technologies in connectivity, propulsion and autonomous driving for customers around the world.”

Navistar President and CEO Persio Lisboa adding to Gründler’s statement, highlighting the “growth trajectory of the combined company.”

“We look forward to continuing to work with the Traton team to create opportunities for our employees and provide an outstanding experience for our customers and dealers through best-in-class products, services and technologies,” he added.

The sources of funding for the cash acquisition of the outstanding Navistar shares includes financing by Volkswagen Group for the equity purchase price of about $3.7 billion. The transaction should be finalized by mid 2021, and is subject to Navistar shareholder approval, customary closing conditions as well as regulatory approvals.

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