Navistar International Corporation has Closed its wide-ranging strategic alliance with Volkswagen Truck & Bus, which includes an equity investment in Navistar by Volkswagen Truck & Bus and framework agreements for a procurement joint venture and strategic technology and supply collaboration.
With the closing of the alliance, Volkswagen Truck & Bus acquired approximately 16.2 million newly issued shares in Navistar, representing 16.6 percent of post-transaction undiluted common stock (or 19.9 percent of pre-transaction outstanding common stock), effective February 28, 2017. As a result, Navistar receives $256 million to be used for general corporate purposes.
As part of the alliance agreement and in line with Volkswagen Truck & Bus’s ownership stake, Renschler and Matthias Gründler, chief financial officer of Volkswagen Truck & Bus, are joining Navistar’s board of directors.
Global Truck & Bus Procurement LLC, the procurement joint venture created by Navistar and Volkswagen Truck & Bus, will start work effective immediately. As part of the alliance, it will create new opportunities for quality improvement and cost reduction, and will enable both companies to benefit from increased global scope and scale. The joint venture is operating out of Navistar’s headquarters in Lisle, Illinois, and comprises representatives from both companies who will be combining the demand of five brands.
Navistar continues to expect significant synergies from both the strategic technology collaboration and the procurement joint venture. As previously announced, Navistar expects the alliance to be accretive beginning in the first year, and for cumulative synergies for Navistar to ramp up to at least $500 million over the first five years. By year five, it expects the alliance will generate annual synergies of at least $200 million for Navistar. This annual run rate is expected to grow materially thereafter as the companies continue to introduce technologies from the collaboration.
Renschler is from Stuttgart, Germany. After completing his training as a banker and graduating with degrees in business engineering and business administration, Renschler began his career at Daimler-Benz AG in 1988. Following various posts at Daimler-Benz AG, he took charge of the M Class unit, serving as president and chief executive officer of Mercedes-Benz US. In 1999, he served as senior vice president, executive management development, at the company then known as DaimlerChrysler AG. He was assigned to Mitsubishi Motors in Japan in spring 2004 and subsequently named member of the Daimler AG board of management with responsibility for the Daimler Trucks Division. He was appointed member of the Daimler AG board of management in charge of Manufacturing and Procurement at Mercedes-Benz Cars & Mercedes-Benz Vans in 2013.
Matthias Gründler was appointed member of the board and chief financial officer at Volkswagen Truck & Bus GmbH, Wolfsburg, Germany. Gründler, also from Stuttgart, studied economics at the IFW in cooperation with the Daimler Academy. In 1986, he joined Daimler Benz AG in Stuttgart. He took up his first management position in 1993 in supply chain management at DaimlerChrysler, followed by positions in sales planning and controlling at Mercedes-Benz Passenger Cars.
From 1999 to 2011, he held various senior positions in Africa and Asia. In 2011, Gründler was appointed head of procurement trucks and buses and business development powertrain and later that year took up the position of head of product platforms, sales & quality powertrain. In 2012 he became chief financial officer Daimler Trucks & Buses at Daimler AG and in 2013 was appointed member of the divisional board Daimler Trucks & Buses and CFO Daimler Trucks & Buses.
Published in the May 2017 Edition of American Recycler News
