AURORA, ON,
July 16, 2015 /PRNewswire/ - 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.