VW's trucks division open to buying majority of Navistar
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FILE PHOTO: A VW sign is seen outside a Volkswagen dealership in London, Britain November 5, 2015. REUTERS/Suzanne Plunkett/File Photo
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By Andreas Cremer
MUNICH (Reuters) - Volkswagen
Volkswagen Truck & Bus acquired a 16.9 percent stake in Navistar International Corp (NYSE: NAV) in 2016 and last week joined forces with Toyota's <7203.T> Hino Motors as it strives to compete more effectively with global truck market leaders Daimler
Volkswagen (VW) plans to convert its trucks division, which includes the Scania and MAN brands and a Brazil-based commercial vehicles business, into a public limited company as a prelude to a potential stock market listing.
"(Taking over Navistar) would make sense at some point," Matthias Gruendler, the finance chief of VW truck and bus, told reporters on Monday.
A takeover would require between 3 and 4 billion in extra costs and could be shouldered without proceeds from a possible initial public offering (IPO), he said, without specifying whether he was talking about euros or dollars.
"The cooperation (with Navistar) is working really well," he added.
U.S. law would require VW to issue a formal takeover bid for Navistar if the German manufacturer raises its stake in the U.S. company above 17 percent, Gruendler said.
VW paid $256 million for its stake in Navistar, bolstering Europe's biggest automaker's access to the lucrative North American truck market.
VW's trucks unit had "significant" synergies from joint procurement with Navistar last year, division CEO Andreas Renschler said.
Foreign expansion, as well as more joint development and purchasing of parts between MAN and Scania, may help VW's truck and bus operations increase their operating margin to 9 percent by about 2025 from 6.9 percent last year, Renschler added.
VW group's supervisory board last Thursday paved the way for a potential IPO of its trucks business as part of a sweeping shake-up that also included naming a new group CEO and plans to streamline its multiple car brands.
Renschler said preparations to tap capital markets either through an IPO or selling debt would take 12 months, adding MAN's
"We need a lot of investment and funding," Renschler said. "We are lifting the (trucks) group to the next level."
(Reporting by Andreas Cremer; Editing by David Evans and Mark Potter)
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