Canadian auto parts giant Magna to buy Getrag Group
AURORA, Ont. - Magna International Inc. says it expects more automakers to begin outsourcing the production of automotive transmissions, and the auto parts maker hopes its C$2.5-billion acquisition of the Getrag Group will position it to benefit from that trend. Ontario-based Magna (TSX:MG) announced plans Thursday to purchase Getrag, a German supplier of automotive transmissions for companies such as Ford, BMW, Daimler, Renault and Volvo. Magna says it will pay 1.75 billion euros for Getrag, which has about 13,500 employees and operations in nine countries in Europe, Asia and North America. The chief executive of Magna says the deal is squarely in line with its strategy of growing its powertrain segment - particularly expanding into the production of transmissions. “We believe advancement in powertrain is a key enabler to achieving the various targets set out by governments around the world, to drive improved fuel efficiency and lower vehicle emissions,” Don Walker told investors and analysts during a conference call. Magna says the offer values Getrag at about C$3.45 billion, after accounting for debt and pension liabilities that Magna will assume.