Volkswagen buys stake in US truck firm

Volkswagen has agreed a deal to buy a 16.6% stake in US truck-maker Navistar.

The agreement gives the German car manufacturer a foothold in the US truck market and Navistar a source for new engines for its fleet of vehicles.

Volkswagen will pay $15.76 (£11.76) for each of 16.2 million new company shares – 12% above Friday’s closing price.

The deal is also creating a joint venture for procurement, which will help Navistar reach synergies of at least $500m (£373m) over five years.

There had been pressure on Navistar and other companies to find technology partners, after US regulators announced new environmental standards to cut greenhouse gas emissions from medium and heavy-duty trucks by up to 25% by 2027.

The company’s chief executive Troy Clarke said: “Over the longer term, it is intended to expand the technology options we are able to offer our customers by leveraging the best of both companies.”