German manufacturer Volkswagen has spent $256 million in order to acquire a 16.6% stake in U.S. truck manufacturer Navistar, according to an announcement made earlier today.
Partnership May Boost Struggling Companies
Both companies have struggled recently — Volkswagen because of an emissions cheating scandal and Navistar because they built thousands of trucks that failed to meet EPA standards.
As part of the alliance, Volkswagen will be awarded two board seats. Together the companies will focus on technology sharing — in particular on powertrain design.
VW Wants To Be “Global Champ” In Commercial Vehicle Industry
In return for their investment, Volkswagen may use the new partnership as a way to get their foot in the door in the North American commercial vehicle market where they currently have no presence. And Navistar should be able to guide the European truck maker toward the longer-nosed truck designs favored by U.S drivers.
Said a representative from Volkswagen, “We are now taking the next step on our way to becoming a global champion in the commercial-vehicles industry.”
Volkswagen has hinted that it could increase its stake in Navistar in the future.
Navistar shares have risen 57% since the news of the deal went public.