VW Truck & Bus buys stake in Navistar for $256 million

NEW YORK (AP) — Volkswagen Truck & Bus, an arm of the German automaker Volkswagen, is buying a minority stake in Navistar for $256 million.

The companies also said Tuesday that they will enter a procurement joint venture that will help source parts for both businesses. There will also be technology sharing, with an anticipated emphasis on powertrain technology.

Volkswagen Truck & Bus will acquire 16.2 million Navistar shares at $15.76 per share and will be allowed to name two directors to Navistar’s board. Navistar will remain an independent truck, bus and engine company.

Navistar International Corp. expects savings of at least $500 million over the first five years. By the fifth year, the Lisle, Ill.,-based company anticipates the alliance will generate annual savings of at least $200 million for its business.

The announcement of the deal comes as Volkswagen AG is trying to move forward in the U.S. following an emissions cheating scandal. Last month it was disclosed that about 210,000 owners of Volkswagens with 2-liter diesel engines that cheat on emissions tests have registered to settle with the company under the terms of a June court agreement. U.S. District Court Judge Charles Breyer has given the $15 billion settlement preliminary approval, with a final decision expected Oct. 18. Terms call for the carmaker to spend up to $10 billion buying back or repairing Volkswagen and Audi 2-liter vehicles and paying owners $5,100 to $10,000 each.

Navistar’s stock surged $8.03, or 57.1 percent, to $22.10 in morning trading Tuesday. Its shares have risen more than 22 percent over the past year.