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Volkswagen Truck & Bus Looks to Takeover Navistar International Corporation

Volkswagen Truck & Bus is a major player in the heavy-vehicle industry. In an attempt to expand its influence in the market, the company is thinking of completely taking over Navistar International Corporation, according to Trucks.com. This would mean that the truck brand International would fall under Volkswagen's control. 

The company bought a significant number of shares in Navistar in 2017, and Andreas Renschler, VW's Truck & Bus CEO, said the company is considering buying the rest of Navistar. This significant development would seem to go against what Renschler and high-level Navistar executives have indicated in the past.

Volkswagen owns roughly 17 percent of Navistar currently, according to the Daily Herald. If VW pushed to gain more of Navistar it could trigger an entire takeover, VW CFO Matthias Gruendler told reporters in a Munich news conference. Gruendler said that a takeover "would theoretically be possible." He went on to state that it would cost billions of dollars. 

Trucks.com notes that VW is considering to make its truck and bus operations into separate public stock offerings. This would likely generate enough money to fund the takeover. Navistar's market value is about $4 billion. Executives from Navistar have avoided commenting on the possibility of VW taking over. 

VW could still acquire more of Navistar stock without having to do a takeover. David Leiker an analyst at the financial management firm Robert W. Baird & Co. told Trucks.com that Navistar's current ownership structure prevents VW from buying 20 percent of the company or more. That said, VW could buy up to 19.9 percent before needing approval from Navistar's board.

Even if VW decides not to do a complete takeover, the company will likely increase its shareholding as much as possible. Still, analysts seem to think that a complete takeover is a smart move. If VW's heavy-vehicle division wants to further expand in the U.S. as its indicated it would like to, buying Navistar would provide the company with an established distribution network in North America at a cheaper price than it would be to build that from scratch, Leiker told Trucks.com.

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