January 26, 2001

Navistar International Corporation Completes Acquisition of Largest Diesel Engine Manufacturer in Brazil

CANOAS, Brazil, Jan. 26 -- Navistar International Corporation (NYSE: NAV), parent company of the producer of International® brand engines, trucks, and buses, announced today that it has finalized arrangements to become the sole owner of Maxion International Motores, a South American engine company.

(Photo: http://www.newscom.com/cgi-bin/prnh/19991207/CGTU007 )

Maxion International Motores produces a full line of diesel engines ranging from 95 to 275 horsepower for use by original equipment manufacturers in Brazil and Argentina and exports a 7.3-liter diesel to Mexico and Australia. Customers include Ford Motor Company, General Motors Corporation, Mercedes Benz and Land Rover in the automotive markets and AGCO in the industrial market.

Dan Ustian, president of the Engine Group of International Truck and Engine Corporation, the operating company of Navistar, said the experience of the joint venture has been both an operational and financial success, exceeding expectations. The change in ownership was accomplished by having Maxion International Motores acquire and retire the shares of other shareowners. The acquisition of shares was funded by a loan from a Brazilian financial institution. Principal and interest on the loan will be supported by cash flows from export shipments by Maxion to customers outside of Brazil.

"This acquisition is consistent with our corporate commitment to invest in businesses that provide growth and return to shareowners," Ustian said. "We have acquired a company that meets or exceeds our target for return on assets required to be successful in our industry over the business cycle."

Navistar acquired its initial 50 percent interest from Iochpe-Maxion S.A. in March of 1999. After the purchase, a joint venture company, Maxion International Motores S.A. was formed.

"Our acquisition of Maxion International Motores provides Navistar with the leading diesel engine company in the Mercosul and fits with our business strategy to be the diesel technology leader, growing with our high volume customers," Ustian said. "We intend to provide the Mercosul market, other countries in South America and other export markets with high-technology engine products that deliver clean diesel power, performance and durability for the world community."

Since Navistar's initial purchase, Maxion International Motores S.A. has broadened its product lineup with the addition of the International 7.3 liter diesel technology and placed stronger emphasis on product development, quality and delivery performance to help its customers grow.

Maxion has manufacturing facilities located in Canoas, Rio Grande do Sul, Brazil and Cordoba, Argentina.

Waldey Sanchez, will continue as managing director of Maxion International Motores. According to Ustian, the management team headed by Sanchez has provided excellent stewardship during the past two years of the venture's existence. They have effectively implemented and launched new manufacturing technology and navigated economic challenges within the Latin American markets, maintaining their leadership position as the largest manufacturer of diesel engines in Brazil.

Navistar International Corporation (NYSE: NAV) is the parent company of International Truck and Engine Corporation, a leading producer of mid-range diesel engines, medium trucks, school buses, heavy trucks, severe service vehicles, and parts and service sold under the International® brand. The company also is a private label designer and manufacturer of diesel engines for the pickup truck, van and SUV markets. With world headquarters in Chicago, Navistar had 2000 sales and revenues of $8.5 billion. Additional information can be found on the company's web site at www.nav-international.com . SOURCE Navistar International Corporation


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