AURORA, ON, July 16, 2015 /CNW/ - Magna International Inc. (TSX: MG, NYSE: MGA) today announced that it has signed an agreement to acquire the Getrag
Group of Companies ("Getrag"), one of the world's largest suppliers of
automotive transmissions.
Getrag has an 80-year history in transmissions and is a technology
leader, offering a range of transmission systems which include manual,
automated-manual, dual-clutch, hybrid and other advanced systems. We
believe the architecture of Getrag's product line is well-positioned to
support current and future automotive powertrain configurations. In
particular, Getrag is a leader in the growing market for dual-clutch
transmissions ("DCTs"), which is expected to be one of the highest
growth segments globally over the next decade.
In addition to its wholly-owned operations, Getrag has significant
joint-venture relationships with Ford, as well as Chinese auto makers
Jiangling and Dongfeng. Other Getrag customers include BMW, Daimler,
Renault, Volvo and Great Wall. Including joint-venture locations,
Getrag has approximately 13,500 employees and operates 13 manufacturing
and 10 engineering centres in nine countries in Europe, Asia and North
America. Getrag's 2014 consolidated sales were approximately €1.7
billion, which excludes approximately €1.6 billion in sales generated
in its non-consolidated joint-ventures.
Don Walker, Magna's Chief Executive Officer, commented: "As part of our
ongoing product portfolio review, we have identified the expansion of
our powertrain business as a strategic priority. Getrag is an
excellent fit with this strategy. Getrag is a technology leader in a
product area that we believe is well-positioned to benefit from
industry trends that are driving increased vehicle fuel-efficiency and
reduced emissions. Getrag's joint venture relationships also provide
significant growth potential in China, the world's largest automotive
market and the fastest growing market for DCTs. Lastly, Getrag has a
highly capable and experienced workforce, including deep powertrain
engineering expertise."
The purchase price for 100% of the equity of Getrag is approximately
€1.75 billion. This represents an enterprise value of approximately
€2.45 billion less proportionate net debt and proportionate pension
liabilities, which together are estimated to be approximately €700
million at closing. The purchase price is subject to working capital
and other customary purchase price adjustments.
The transaction is expected to close near the end of 2015, subject to a
number of conditions including obtaining all necessary regulatory
approvals.
We will hold a conference call for interested analysts and shareholders
to review the acquisition on Thursday, July 16, 2015 at 8:30 a.m. EDT.
The conference call will be chaired by Don Walker, Chief Executive
Officer. The number to use for this call is 1-800-768-9481. The number
for overseas callers is 1-416-981-9031. Please call in at least 10
minutes prior to the call. We will also webcast the conference call at www.magna.com. A slide presentation accompanying the conference call will be
available on our website Thursday morning prior to the call.
For anyone unable to listen to the scheduled call, the rebroadcast
numbers will be: North America 1-800-558-5253 and overseas
1-416-626-4100 (reservation number is 21772389) and will be available
until Thursday, July 23, 2015.
ABOUT MAGNA
We are a leading global automotive supplier with 316 manufacturing
operations and 87 product development, engineering and sales centres in
29 countries. We have approximately 133,000 employees focused on
delivering superior value to our customers through innovative processes
and World Class Manufacturing. Our product capabilities include
producing body, chassis, interior, exterior, seating, powertrain,
electronic, vision, closure and roof systems and modules, as well as
complete vehicle engineering and contract manufacturing. Our common
shares trade on the Toronto Stock Exchange (MG) and the New York Stock
Exchange (MGA). For further information about Magna, visit our website
at www.magna.com.
FORWARD LOOKING STATEMENTS
This press release contains statements that constitute "forward-looking
statements" or "forward-looking information" within the meaning of
applicable securities legislation, including, but not limited to,
statements relating to: strategic benefits expected to result from the
acquisition; anticipated growth of the DCT market and our ability to
capitalize on such expected growth; potential growth opportunities in
China with Getrag's joint venture partners; and our ability to benefit
from industry trends related to increased fuel efficiency and reduced
emissions. The forward-looking information in this document is
presented for the purpose of providing information about management's
current expectations and plans and such information may not be
appropriate for other purposes. Forward-looking statements may include
financial and other projections, as well as statements regarding our
future plans, objectives or economic performance, or the assumptions
underlying any of the foregoing, and other statements that are not
recitations of historical fact. We use words such as "may", "would",
"could", "should", "will", "likely", "expect", "anticipate", "believe",
"intend", "plan", "forecast", "outlook", "project", "estimate" and
similar expressions suggesting future outcomes or events to identify
forward-looking statements. Any such forward-looking statements are
based on information currently available to us, and are based on
assumptions and analyses made by us in light of our experience and our
perception of historical trends, current conditions and expected future
developments, as well as other factors we believe are appropriate in
the circumstances. However, whether actual results and developments
will conform with our expectations and predictions is subject to a
number of risks, assumptions and uncertainties, many of which are
beyond our control, and the effects of which can be difficult to
predict, including, without limitation: the satisfaction or waiver of
conditions to complete the transaction, including obtaining required
regulatory approvals, and the consummation of the transaction; our
ability to successfully identify, complete and integrate acquisitions
or achieve anticipated synergies; our ability to conduct appropriate
due diligence on acquisition targets; risks of conducting business in
foreign markets, including China, India, Russia, Eastern Europe,
Thailand, Brazil, Argentina and other non-traditional markets for us;
ongoing pricing pressures, including our ability to offset price
concessions demanded by our customers; our ability to consistently
develop innovative products or processes; warranty and recall costs;
pension liabilities; the impact of economic or political conditions on
consumer confidence, consumer demand for vehicles and vehicle
production; fluctuations in relative currency values; restructuring,
downsizing and/or other significant non-recurring costs; continued
underperformance of one or more of our operating Divisions; our ability
to successfully launch material new or takeover business; shifts in
market share away from our top customers; inability to grow our
business with OEMs; shifts in market shares among vehicles or vehicle
segments, or shifts away from vehicles on which we have significant
content; a prolonged disruption in the supply of components to us from
our suppliers; shutdown of our or our customers' or sub-suppliers'
production facilities due to a labour disruption; scheduled shutdowns
of our customers' production facilities (typically in the third and
fourth quarters of each calendar year); our ability to successfully
compete with other automotive suppliers; reduction in outsourcing by
our customers or the loss of a material production or assembly program;
the termination or non-renewal by our customers of any material
production purchase order; impairment charges related to goodwill and
long-lived assets; exposure to, and ability to offset, volatile
commodities prices; risk of production disruptions due to natural
disasters or other catastrophic events; the security and reliability of
our IT systems; legal claims and/or regulatory actions against us,
including the ongoing antitrust investigations being conducted by
German and Brazilian authorities; changes in our mix of earnings
between jurisdictions with lower tax rates and those with higher tax
rates, as well as our ability to fully benefit tax losses; other
potential tax exposures; changes in credit ratings assigned to us;
changes in laws and governmental regulations; costs associated with
compliance with environmental laws and regulations; liquidity risks as
a result of an unanticipated deterioration of economic conditions; our
ability to achieve future investment returns that equal or exceed past
returns; the unpredictability of, and fluctuation in, the trading
price of our Common Shares; and other factors set out in our Annual
Information Form filed with securities commissions in Canada and our
annual report on Form 40-F filed with the United States Securities and
Exchange Commission, and subsequent filings. In evaluating forward
looking statements, we caution readers not to place undue reliance on
any forward-looking statements and readers should specifically consider
the various factors which could cause actual events or results to
differ materially from those indicated by such forward-looking
statements. Unless otherwise required by applicable securities laws, we
do not intend, nor do we undertake any obligation, to update or revise
any forward-looking statements to reflect subsequent information,
events, results or circumstances or otherwise.
SOURCE Magna International Inc.
