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Preliminary Proxy Statement
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Definitive Proxy Statement
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Definitive Additional Materials
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Delaware
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1-9618
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36-3359573
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(State or other Jurisdiction of Incorporation)
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(Commission File Number)
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(IRS Employer Identification No.)
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2701 Navistar Drive
Lisle Illinois
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60532
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(Address of Principal Executive Offices)
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(Zip Code)
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1. |
Why is TRATON acquiring Navistar?
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This combination will create a global champion in commercial vehicles with enhanced scale, a strong portfolio of best-in-class brands, and a clear leader in cutting-edge products, technologies, and services.
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TRATON will gain access to the North American truck and bus market through Navistar’s expansive distribution network, strongly complementing TRATON’s existing footprint, and the combined company will be a global leader.
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Over the past four years, both TRATON and Navistar have benefited from a highly collaborative and productive strategic alliance on procurement and technology development.
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As we’ve worked together, we have recognized that there are compelling strategic and financial benefits from a combination of Navistar and TRATON. We see this as a logical next step in our relationship.
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2. |
Why is Navistar entering into the transaction now?
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The Navistar Board of Directors believes that TRATON’s offer at $44.50 per share delivers compelling, immediate, and substantial cash value to shareholders and is in the best interests of the company, its shareholders and its other
stakeholders.
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After thoroughly reviewing a range of possible strategic opportunities for maximizing value, Navistar’s Board of Directors determined this transaction is in the best interests of the company’s shareholders and other stakeholders.
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Combining our companies will create a global leader with significantly enhanced prospects for product development and financial performance.
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Over the past four years, both TRATON and Navistar have benefited from a highly collaborative and productive strategic alliance on procurement and technology development. The combination is a logical next step in the TRATON-Navistar
relationship and builds off the success of the strategic alliance.
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3. |
How will this transaction be different than the current strategic alliance?
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The strategic alliance was a successful partnership that included an equity investment of 16.7% ownership of Navistar by TRATON.
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This transaction will result in TRATON acquiring the remaining outstanding common shares of Navistar for $44.50 per share.
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A full combination of the companies will allow both Navistar and TRATON to pursue additional synergies beyond what was possible in the strategic alliance, including additional cost savings, a full integration of R&D capabilities and
cost of capital opportunities.
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Additionally, we see new revenue opportunities for growth in products and services by leveraging Navistar’s extensive dealer network.
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TRATON made its initial proposal on January 30, 2020. Why has this transaction process taken so long?
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These types of processes can often take some time, especially when you factor in the global pandemic’s impact on the macroeconomic and operating environment.
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We’re proud to have emerged from the pandemic stronger and more resilient, having been able to accelerate Navistar 4.0 and having realized some permanent SG&A savings, positioning us well for a combination at this time.
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After thoroughly reviewing the revised proposal from TRATON in consultation with its financial and legal advisors, the Board determined this transaction was in the best interest of the company, its shareholder, and other stakeholders.
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5. |
Do you expect any adverse reactions from your customer base, dealer network or suppliers?
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This is a highly complementary transaction for both parties, combining Navistar’s North American footprint with TRATON’s presence mainly in Europe and South America.
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TRATON’s commitment, financial resources and capabilities will strengthen Navistar’s position in core markets, which will result in significant benefits for Navistar customers, dealers, and suppliers.
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TRATON will leverage Navistar’s operations to pursue growth in North America and related markets.
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We are excited about this transaction and are confident that our key stakeholders will share our enthusiasm for what lies ahead.
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Will the Company maintain the Navistar name and brand?
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There are no changes planned at this time. Today it is business as usual for Navistar.
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When is the deal expected to close?
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The transaction is expected to close in mid 2021 and is subject to Navistar shareholder approval as well as customary closing conditions and regulatory approvals.
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8. |
What are the next steps in the transaction and what is the timeline for integration?
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The transaction is expected to close in mid 2021 and is subject to customary closing conditions, including approval from Navistar’s shareholders and the receipt of regulatory approvals such as HSR and foreign country antirust approvals.
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Operationally, it is business as usual for Navistar until the closing of the transaction. We will continue to support our customers, dealers, and business partners throughout this process, and we remain committed to delivering the best
quality and service.
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What regulatory approvals does this transaction require and does Navistar see any challenges in obtaining them?
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The transaction is subject to customary closing conditions, including approval from Navistar shareholders and the receipt of regulatory approvals such as HSR and foreign country antitrust approvals.
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How does this transaction compare to past transactions in the sector from a price perspective?
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The Navistar Board of Directors firmly believes that TRATON’s offer at $44.50 per share delivers compelling, immediate, and substantial cash value to shareholders and is in the best interests of the company and its shareholders and other
stakeholders.
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Where are the synergies coming from and how confident is TRATON in its ability to achieve them?
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Navistar and TRATON will create a complementary business with significant synergy opportunities.
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The acquisition of Navistar will significantly leverage TRATON’s positioning in North America, one of the biggest and most profitable markets for heavy trucks. Together the companies can enhance scale and reach in key markets as well as
pursue further synergies.
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Will Navistar remain listed on the NYSE?
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No. Following the transaction close in mid 2021, Navistar will be owned and operated by TRATON and will no longer be listed on NYSE.
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Was this transaction pushed for by one of Navistar’s major shareholders (e.g. Icahn or MHR)?
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Navistar’s Board of Directors has always been committed to maximizing value for shareholders and the Board strongly believes that a transaction with TRATON delivers compelling, immediate, and substantial cash value to shareholders.
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After thoroughly reviewing a range of possible strategic opportunities for maximizing value, the Board determined this transaction was in the best interests of the company, its shareholders, and other stakeholders.
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Icahn and MHR are supportive of the transaction and have provided voting agreements pledging to support the transaction, subject to customary exceptions, in their respective shareholder capacities.
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Will there be any layoffs at Navistar as a result of the transaction?
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Operationally, it is business as usual for Navistar until closing of the transaction. Supporting our customers, dealers, and business partners is of the upmost importance, and we remain committed to delivering the best quality and service.
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We expect Navistar will become an even more attractive employer, with employees enjoying new opportunities.
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TRATON and Navistar have developed a close relationship over the course of the strategic relationship, and we believe this combination is appropriate from both a strategic and cultural point of view.
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The benefits of the proposed transaction would not be predicated on plant closures.
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The two companies complement each other in many areas. Currently, TRATON has no presence in the North American truck and bus market and will use this transaction to grow by utilizing Navistar’s plants, dealers, and employees.
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How will union workers be affected?
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Operationally, it is business as usual for Navistar until closing of the transaction. Supporting our customers, dealers, and business partners is of the upmost importance, and we remain committed to delivering the best quality and service.
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TRATON currently has a unionized workforce and has a well-established track record of working with, listening to and respecting the rights of its workforce.
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Will this affect the Navistar employee pensions or benefits?
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Existing retirement and benefit plans will continue.
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Navistar’s current compensation and benefit programs will continue through closing and TRATON has committed to providing substantially similar benefits for at least one year after the transaction.
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What Navistar facilities will be impacted? If there are closures, what is the timeline for these?
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The benefits of this proposed transaction would not be predicated on plant closures.
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Currently, TRATON has no presence in the North American truck and bus market and will use this transaction to grow by utilizing Navistar’s plants, dealers, and employees.
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What will happen to Navistar’s headquarters in Lisle, Illinois?
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There are no changes planned as a result of the merger announcement.
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How will this change day-to-day operations?
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Operationally, it is business as usual for Navistar.
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Supporting our customers, dealers, and business partners is of the upmost importance, and we remain committed to delivering the best quality and service.
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Will this transaction change Navistar’s business model?
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The combination is the logical next step in the TRATON-Navistar relationship and builds off the success of the two companies’ strategic alliance, which has been in place since 2017.
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TRATON will gain access to the North American truck and bus market through Navistar’s expansive distribution network, strongly complementing TRATON’s existing footprint, and the combined company will be a true global leader.
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Will Navistar stop making any of its current products? If so, when?
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The combination will create opportunities for additional business growth, not only in North America, but globally.
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The transaction will also provide Navistar with the financial stability and strength to drive further investments in product, technology, and markets, which will allow us to grow market share.
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Today it is business as usual for Navistar.
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22. |
Will my base pay change?
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Navistar’s current compensation and benefit programs will continue to be relatively similar through closing and for at least one year after the transaction.
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What happens to the Annual and Special Incentive Programs?
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The Fiscal Year 2021 Annual Incentive Plan recently communicated with employees and the Special Incentive Program will remain the same.
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24. |
What happens to our Long Term Incentive Program?
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Previous Long Term Incentive Grants will be cash settled either according to the original vesting schedule or accelerated at closing.
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A detailed communication will be prepared for Long Term Incentive program participants prior to closing.
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25. |
How will Navistar’s culture change as a result of this?
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TRATON has worked closely with Navistar for nearly four years, and they know Navistar and our employees well. Our goal is to continuously improve what we do and how we do it, and this includes our culture, so we look forward to any
opportunities that might arise.
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Being a European company TRATON will have different culture, governance and norms. We will learn about each other over time.
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Will we still be able to hire new employees?
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Continuing our talent management processes are critical to the success of our business. Consistent with our normal course of business and with customary approval processes, we can continue our hiring processes.
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What does this transaction mean for Navistar customers? Will there be any changes in existing contracts?
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The combination will create new opportunities for business growth, including accelerating Navistar’s Vision 2025 customer experience, increasing scale for advanced vehicle technologies and business models, and securing sustainable strength
for Navistar through the combined company’s stronger balance sheet.
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Customers in particular will have new opportunities including increased access to world-leading technologies in internal combustion engines and safety and emerging technologies such as autonomous and electrification.
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What type of opportunities will this transaction present for suppliers?
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The combination will create opportunities for additional business growth, not only in North America, but across the globe.
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The transaction will also provide Navistar with the financial stability and strength to drive further investments in product, technology, and markets, which will allow us to aggressively grow market share.
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Will there be any complications for suppliers as a result of the transaction?
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Operationally, it is business as usual for Navistar.
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Is Navistar concerned that its current suppliers will end their contracts [early / before Navistar is ready to switch over to using TRATON’s supplier network]?
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No. The combination will create opportunities for additional business growth, not only in North America, but globally.
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The transaction will also provide Navistar with the financial stability and strength to drive further investments in product, technology, and markets, which will allow us to grow market share.
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31. |
Navistar extended its long-term partnership with Cummins in August 2020. What will the transaction mean for this agreement? What will it mean for similar agreements Navistar has with suppliers?
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There are no changes to existing contracts as a result of the merger announcement.
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What types of opportunities will this transaction present for dealers?
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TRATON will provide Navistar with access to world-leading advancements in engine development and safety and emerging technologies, including autonomous and electrification.
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Navistar will have more opportunities to leverage advanced vehicle technologies and business models as well as increased access to a global manufacturing footprint and supplier base.
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The combination will create new opportunities for business growth and securing sustainable strength through the combined company’s stronger balance sheet.
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TRATON’s financial resources and capabilities will strengthen Navistar’s position in core markets, provide added resources to invest and grow Navistar’s business.
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Will there be any complications for dealers as a result of the transaction?
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Operationally, it is business as usual for Navistar. Supporting our customers, dealers, and business partners is of the upmost importance, and we remain committed to delivering the best quality and service.
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