Equipment World

October 2016

Equipment World Digital Magazine

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EquipmentWorld.com | October 2016 77 N avistar has announced a plan to pursue a strategic alliance with Volkswagen Truck and Bus, which includes an equity investment in Navistar by Volkswa- gen, agreements for technology and supply collaboration and a procure- ment joint venture. Under the terms of the agree- ment, Volkswagen will take a 16.6-percent stake in Navistar, in- vesting $256 million in the company and appointing two directors to the Navistar board of directors. For Volkswagen, the deal rep- resents a chance to break into the North American truck market while Navistar says it expects to realize cumulative synergies of $500 million over the first five years of the deal. At the end of five years, Navistar officials say they expect the alliance will generate at least $200 million per year in synergies. The procurement joint venture will help both companies source parts and provide Navistar access to global sourcing opportunities and improved pricing. The technology partnership will focus on pow- ertrain solutions and explore col- laborations in commercial vehicle development, including advanced driver assistance systems, connected vehicle solutions, platooning and autonomous technologies, electric vehicles, and cab and chassis com- ponents. Volkswagen owns three major truck brands in Scania, MAN and Volkswagen Caminhões e Ônibus – all of which operate in European and South American markets and will likely leverage Navistar's large North American International and IC Bus dealership network for fu- ture sales. The deal will also give Navistar heavy trucks | by Tom Jackson | TJackson@randallreilly.com Navistar announces strategic alliance with Volkswagen International WorkStar dump configuration.

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