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Oshkosh, Navistar shares rise on merger talk

October 21, 2011

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NEW YORK—Shares of truck makers Oshkosh Corp. and Navistar International Corp. rose Friday after media reports suggested that billionaire investor Carl Icahn wants the two truck makers to consider a combination.

THE SPARK: Citing unnamed sources, Reuters reported that Icahn wants the two rivals to merge. The investor owns about 10 percent of each company's outstanding shares. Icahn reported his stake in Navistar last week. He said them that he was in talks with management at the time to discuss strategies.

The Reuters report said that Icahn hasn't yet made a formal proposal to either company and a deal is far from a sure thing. Representatives for Navistar of Warrenville, Ill., weren't immediately available to comment. An Oshkosh spokesman said the Oshkosh, Wis., company doesn't comment on shareholder discussions.

THE BIG PICTURE: A combination of the two companies has been much discussed as a way for them to cut costs and get rid of excess capacity. In addition to streamlining the two operations, a merger could also match up some complimentary businesses of the two companies.

SHARE ACTION: Oshkosh shares rose 8.2 percent, or $1.50, to $19.90. Navistar shares gained 4 percent, or $1.59, to $41.69. Oshkosh's stock has lost about 40 percent of its value since July, while Navistar shares have fallen 28 percent in the same period.