Magna International’s Position Likely To Improve Post Getrag Acqusition

July 16, 2015 : 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.

About

Roger Gillespie, MBA, is research analyst and focuses Services, Technology and Energy & Utilities sectors. Prior joining Equities Mogul, Roger Gillespie worked with Telsey Research. If you have a great story idea for Roger Gillespie, you can write at [roger.gillespie@equitiesmogul.com ].

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