Caterpillar Inc. and Navistar International Thursday announced the settlement of various lawsuits regarding all current and pending litigation between the two companies.
As part of the agreement, Caterpillar will receive an up-front cash payment and a three-year promissory note from Navistar, and the settlement will result in an after-tax charge to Cat of about $50 million because of its current receivable balances related to the Navistar litigation.
The companies also signed a series of licensing and long-term supply agreements that are expected to increase business opportunities for both companies.
"Navistar is a very important customer to Caterpillar, and I'm pleased we're able to settle our differences and move forward in a positive way," said Caterpillar Chairman and Chief Executive Officer Jim Owens. "This agreement provides a solid foundation for a continued long-term business relationship that benefits us both."
Long-term supply agreements have been established for Caterpillar on highway truck engines, fuel injectors and remanufacturing services. As part of the agreement, Caterpillar Remanufacturing will act as International Truck & Engine's lead global remanufacturing service provider. Under this new relationship, the parties will examine and explore opportunities to enhance the overall value of International's remanufactured products and services. International Truck is a unit of Navistar.
Navistar Chairman, President and Chief Executive Officer Daniel Ustian said, "This agreement sets in place the framework for further expansion of our long relationship with Caterpillar. I am extremely pleased that we have been able to reach agreement on issues that were a distraction to both companies and can concentrate on working together to continue to build a productive and prosperous relationship."