Navistar Likely Buyer of GM Medium-Duty Truck Unit

Navistar International Corp. (NAVZ.PK) is the likely front-runner to buy General Motors’ (GM) medium-duty truck unit, sources close to the negotiations have reported. The deal could be announced as early as Thursday. Details are sketchy and both companies refused to comment, though a Navistar spokesperson did say to “stay tuned.” Bear Stearns values the unit at roughly $500 million. GM has sold off approximately $21 billion in assets over the past three years to help cover net losses of more than $50 billion and focus on its core business. According to Morgan Keegan analyst Pete Hastings, “They might as well monetize one more non-strategic asset to fund the turnaround. GM doesn't have a liquidity problem, but adding more coins to the coffers is never a bad thing.” Navistar, which manufactures both trucks and truck engines, saw its shares climb 7.5% on light volume Wednesday. GM shares were down 1%.

Sources: Wall Street Journal, Bloomberg

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