Volkswagen Group heavy-truck unit Traton said Friday it had agreed to raise its takeover bid for Navistar International Corp. to $44.50 per share from $43, closing in on a deal that would extend its reach into North America.

A successful merger would combine the MAN, Scania and Volkswagen trucks brands with Navistar to create a global manufacturer, at a time when the industry is seeking ways to share the costs of developing low emissions technology. Traton currently has no direct access to the North American market, the industry’s largest source of profits, and instead relies on sales in Europe and Latin America.

At $44.50 per share, Traton would pay about $3.7 billion for the shares in Navistar it doesn’t already own, valuing the U.S. business as a whole at around $4.4 billion.

“Traton SE and the U.S.-American truck manufacturer Navistar International Corporation, in which Traton already holds a stake of 16.8 percent, have today reached agreement in principle that Traton will acquire by merger all shares in Navistar not already held by Traton, at a price of $44.50 per Navistar share,” Traton said in a statement.

A deal hinges on finalizing due diligence, agreeing to merger terms and related transaction documents and approval by the executive bodies of Navistar and Volkswagen, Traton said.

“There is no assurance that the parties will reach agreement on definitive transaction documentation, or as to the terms thereof or that any transaction, if such agreement is reached, will ultimately be consummated,” Traton cautioned.

The announcement follows hours of negotiations, with Navistar’s board saying the offer would need to be raised to $44.50 per share to win shareholders’ backing, hours before Traton’s $43 per share offer was due to expire.

Traton had already raised its initial $35 per share offer last month.

Shares of Navistar closed Friday’s trading up 22.9 percent to $43.52.

Traton had struggled to win over billionaire activist investor Carl Icahn, whose fund held a 16.8 percent stake in the U.S. truck maker as of June 30, according to Refinitiv Eikon Data.

Icahn and two other activist funds, Mark Rachesky’s MHR Fund Management and Gabelli Funds, together own about 40 percent of Navistar’s shares, according to Refinitiv data.

Boosting the value of VW’s trucks unit has been a major priority for CEO Herbert Diess. Traton is in the midst of a major restructuring of its MAN unit and Diess called out the importance of acquiring Navistar in his address to shareholders at VW’s annual general meeting.

Bloomberg contributed to this report.