Volkswagen AG has said that it is buying a 16% stake in US truckmaker, Navistar International Corp. At $15.76 a share, that adds up to $256 million.

According to Automotive News, the companies expect to reap combined synergies of $500 million over the next five years.

Crucially, this is a chance for Volkswagen to get into the US heavy-truck market where it has struggled to gain a foothold against the big players like Daimler AG and Volvo AB.


The strategic alliance with Navistar is an important milestone and will be very beneficial for both sides,” says Andreas Renschler, CEO of Volkswagen Truck and Bus.

The partnership will focus on common powertrain systems and Volkswagen will gain two board seats at Navistar.

Navistar is based out of Lisle, Illinois, and produces International brand trucks and IC Bus school and commercial buses.