Tesma Acquires Hanwha Automotive Components Corporation

4 January 1999

    CONCORD, ON, Jan. 4 /CNW-PRN/ - Tesma International Inc. (TSE:TSM.A;
NASDAQ:TSMAF) today confirmed that on December 24, 1998 it entered into an
agreement with Hanwha Corporation and Ford Motor Company to purchase 100% of
the outstanding shares of Hanwha Automotive Components Corporation, a Korean
supplier of oil and water pump systems to Ford, Mazda, Isuzu and other
automotive customers. The purchase price for this transaction is fixed at
US$7.0 million (Cdn. $10.7 million) plus a potential earn-out of up to a
further US$2.0 million (Cdn. $3.1 million) payable over four years. With
substantial export sales and increasing opportunities for growth in the Asia
Pacific market, this acquisition is expected to immediately enhance Tesma's
pump supply capabilities and position the Company as a long-term preferred
supplier with Ford for oil and water pump products on a global basis. This
transaction is scheduled to close on January 14, 1999, subject to the
satisfactory completion of Tesma's due diligence and the receipt of applicable
regulatory approvals. For the year ended December 31, 1998, Hanwha Automotive
had net assets of approximately 39.5 billion Korean Won (Cdn. $50 million) and
estimated sales of 23 billion Korean Won (Cdn. $30 million), employing
approximately 195 people at two manufacturing facilities.
    ``The acquisition of Hanwha Automotive supports Tesma's modular products
supply strategy and will help make us one of the largest independent suppliers
of engine and transmission oil and water pump systems to the global automotive
industry'', said Manfred Gingl, Tesma's President and CEO. ``When completed,
this transaction will provide Tesma with our first manufacturing capabilities
in South East Asia, and allow us to expand and more directly service our
customer base in the important Asian Pacific automotive market.''
    Tesma is a global supplier of highly engineered engine, transmission and
fueling systems and components for the automotive industry. Tesma's strong
market presence and strategy for continuing growth results from its unique
focus on Innovation, Engineering and Performance. Tesma employs over 3,000
employees in 19 manufacturing facilities in North America and Europe.