Volkswagen truck unit takes stake in Navistar partner amid takeover talks
Volkswagen AG’s Traton is partnering with a self-driving startup that recently aligned with Navistar International Corp., the US manufacturer that VW’s truck unit is trying to acquire.
Traton SE and TuSimple Inc. will team up initially to develop autonomous trucks for a set route in Sweden, the companies announced in a joint statement Wednesday. They’ll work together on a Level 4 automation system that will render Scania vehicles capable of driving without human intervention under certain conditions. Their goal will be to eventually test fleets throughout Sweden, Germany and other countries.
Traton has taken a minority stake in TuSimple as part of the partnership, mimicking a tie-up the San Diego-based startup announced with Navistar two months ago. Traton already has an almost 17% stake in Navistar and has offered $3.6 billion to buy the rest. Navistar has said that while Traton’s bid underestimates its value, the Lisle, Illinois-based company wants to engage in further talks.
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The partnership with TuSimple is “another step toward becoming a global champion," Matthias Gruendler, Traton’s new chief executive officer, said in the statement. He will address shareholders for the first time on Wednesday at the company’s annual general meeting after succeeding Andreas Renschler as part of an abrupt management reshuffling this summer.
Investors will be eager for updates from Gruendler on cost cuts at Traton’s troubled MAN division, its progress rolling out electric and self-driving trucks and the takeover talks with Navistar. Traton is the company’s second-largest shareholder, behind the billionaire investor Carl Icahn, according to data compiled by Bloomberg.
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“In a takeover negotiation phase, there is inherently some friction between buyer and seller," said Roman Mathyssek, a Munich-based consultant at Arthur D. Little GmbH. “When assessing the offer from Traton, shareholders should amongst others take Navistar’s profitability into account, which is on the weak side relative to its global peer group."
Acquiring the maker of International brand commercial trucks would enable Traton to access the North American truck market, which accounts for the biggest chunk of industry profits. The two also would presumably save substantial development costs related to new technology.