The following key messages were
distributed on November 7, 2020 to Navistar International
Corporation’s (“Navistar’s”) management team for discussions
with Navistar’s employees regarding key messages with respect to
the proposed acquisition of Navistar by TRATON SE
(“TRATON”).
KEY MESSAGES
Overall
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Navistar today announced it has entered into a definitive
agreement to be acquired by TRATON, one of the world’s largest
commercial vehicle manufacturers, for $44.50 per share in
cash.
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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 in Europe and South
America.
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The combination is a logical next step in the TRATON-Navistar
relationship and builds on the success of the two companies’
strategic alliance, which has been in place since March 1,
2017.
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After thoroughly reviewing a range of possible strategic
opportunities for maximizing value, Navistar’s Board of Directors
determined this transaction was in the best interests of the
company, its shareholders and other stakeholders.
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The Board strongly believes that a transaction with TRATON
delivers compelling, immediate and substantial cash value to
shareholders.
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Benefits for Both Companies – Strategic Rationale
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This transaction creates a company with reach across key truck
markets worldwide, including scale and capabilities to deliver
cutting-edge products, technologies and services to our
customers.
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For nearly 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 for several years now, we have
recognized that there are even more compelling strategic and
financial benefits to a combination of Navistar and TRATON, and we
see this as a logical next step in our relationship.
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Combining TRATON’s leading position in the European and
substantial presence in South America with Navistar’s presence in
North America will create a leader with global reach and
complementary capabilities.
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Financial Rationale
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The Board strongly believes that a transaction with TRATON
delivers compelling, immediate and substantial cash value to
shareholders.
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Approvals / Closing
Conditions
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The transaction is expected to close in mid 2021 subject to
customary closing conditions, including approval from Navistar’s
shareholders and the receipt of regulatory approvals such as HSR
and foreign country antitrust approvals.
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TRATON’s acquisition of Navistar has been approved by the
boards of directors of both companies.
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Operationally, it is business as usual for Navistar until the
closing of the transaction.
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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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Customer Specific Messages
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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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Dealer Specific Messages
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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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TRATON’s commitment, 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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Supplier Specific Messages
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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 grow market
share.
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Government Specific Messages
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TRATON’s commitment, financial resources and capabilities will
strengthen Navistar’s position in core markets and create a global
champion in commercial vehicles.
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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. TRATON will benefit from
our manufacturing footprint, expansive dealer networks and expert
employee base.
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Over the past almost four years, both TRATON and Navistar have
benefited from a highly collaborative and productive strategic
alliance on procurement and technology development, and TRATON has
been a part of Navistar’s Board of Directors during this
time.
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TRATON has been supportive of the Navistar 4.0 strategy, which
includes increased capitalization in our manufacturing
capabilities, investments in transformational technologies, and
acceleration of the customer experience.
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The transaction is expected to close in mid 2021 subject to
customary closing conditions, including approval from Navistar’s
shareholders and the receipt of regulatory approvals such as HSR
and foreign country antitrust approvals.
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Employee Specific Messages
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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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TRATON knows Navistar well and looks forward to continuing to
work with Navistar to create opportunities for employees.
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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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The benefits of the proposed transaction would not be
predicated on plant closures.
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Operationally, it is business as usual for Navistar. This
means we will continue our path to Navistar 4.0, with added
resources and scale needed to accelerate the pace of our progress
toward financial and operational improvements and a stronger market
presence.
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Driven by the Navistar 4.0, our success will mean an
unparalleled customer experience, mutually beneficial relationships
with employees, dealers, and suppliers.
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Navistar will become an even more attractive employer, with
employees enjoying greater access to global assignment
opportunities and career development potential.
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Union Specific Messages
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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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TRATON intends to leverage Navistar’s footprint and operations
to pursue growth.
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TRATON looks forward to continuing to work with Navistar to
create opportunities for employees.
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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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Additional Information and Where to
Find It
This communication may be deemed to
be solicitation material in respect of the proposed acquisition of
Navistar by TRATON. In connection with the proposed
acquisition, Navistar intends to file relevant materials with the
SEC, including a proxy statement on Schedule 14A. INVESTORS
AND STOCKHOLDERS OF NAVISTAR ARE URGED TO READ ALL RELEVANT
DOCUMENTS FILED WITH THE SEC, INCLUDING NAVISTAR’S PROXY STATEMENT,
BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED
ACQUISITION. Investors and stockholders of Navistar will be
able to obtain the proxy statement and other documents filed with
the SEC (when available) free of charge at the SEC’s web site,
http://www.sec.gov. The proxy statement is not currently
available.
Participants in the
Solicitation
Navistar, TRATON and their
respective directors and executive officers may be deemed to be
participants in the solicitation of proxies from Navistar’s
stockholders in respect of the proposed acquisition.
Information about the directors and executive officers of Navistar
is set forth in the proxy statement for its 2020 annual meeting of
stockholders, which was filed with the SEC on January 6, 2020, and
in the Company’s Annual Report on Form 10-K for the fiscal year
ended October 31, 2019, which was filed with the SEC on December
17, 2019. Other information regarding the participants in the
proxy solicitation and a description of their direct and indirect
interests, by security holdings or otherwise, will be contained in
the proxy statement and other relevant materials to be filed with
the SEC in respect of the proposed transaction when they become
available.
Forward-Looking Statements
Certain statements in this
communication, that are not purely historical, may constitute
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, Section 21E of the Securities Exchange Act
of 1934, and the Private Securities Litigation Reform Act of 1995,
each as amended. Forward-looking statements provide current
expectations of future events and include any statement that does
not directly relate to any historical or current fact. Words
such as “anticipates,” “believes,” “expects,” “intends,” “plans,”
“projects,” or other similar expressions may identify such
forward-looking statements.
Actual results may differ
materially from those discussed in forward-looking statements as a
result of factors, risks and uncertainties over which Navistar has
no control. These factors, risks and uncertainties include,
but are not limited to, the following: (i) conditions to the
completion of the proposed acquisition, including stockholder
approval of the proposed acquisition, may not be satisfied or the
regulatory approvals required for the proposed acquisition may not
be obtained on the terms expected or on the anticipated schedule;
(ii) the occurrence of any event, change or other circumstance that
could give rise to the termination of the merger agreement between
the parties to the proposed acquisition; (iii) the effect of the
announcement or pendency of the proposed acquisition on Navistar’s
business relationships, operating results, and business generally;
(iv) risks that the proposed acquisition disrupts Navistar’s
current plans and operations and potential difficulties in
Navistar’s employee retention as a result of the proposed
acquisition; (v) risks related to diverting management’s attention
from our ongoing business operations; (vi) potential litigation
that may be instituted against Navistar or its directors or
officers related to the proposed acquisition or the merger
agreement between the parties to the proposed acquisition; (vii)
the amount of the costs, fees, expenses and other charges related
to the proposed acquisition; and (viii) such other factors as are
set forth in Navistar’s periodic public filings with the SEC,
including but not limited to those described under the headings
“Risk Factors” and “Forward Looking Statements” in its Form 10-K
for the fiscal year ended October 31, 2019, its quarterly report on
Form 10-Q for the period ended April 30, 2020, and in its other
filings made with the SEC from time to time, which are available
via the SEC’s website at www.sec.gov.
Forward-looking statements reflect
the views and assumptions of management as of the date of this
communication with respect to future events. Navistar does
not undertake, and hereby disclaims, any obligation, unless
required to do so by applicable securities laws, to update any
forward-looking statements as a result of new information, future
events or other factors. The inclusion of any statement in
this communication does not constitute an admission by Navistar or
any other person that the events or circumstances described in such
statement are material.
