Joint press release - Magna and Tesma announce the proposed combination of Tesma and the Magna Steyr Group

    AURORA, ON, May 17 - Magna International Inc.
("Magna") and Tesma International Inc.
("Tesma") jointly announced today that they have entered into a non-
binding letter of intent concerning the proposed combination of Tesma and the
Magna Steyr group to form a new global powertrain supplier that would combine
the recognized strengths and capabilities of both organizations.
    This combination would create a leading global full-service powertrain
supplier, incorporating Tesma's successful engine, powertrain and fueling
systems products businesses with Magna Steyr's strong powertrain, engineering
and vehicle assembly businesses, including four-wheel drive systems and
complete vehicle assembly expertise in Europe. For Magna, the proposed
combination is in keeping with its objective of restructuring its operating
groups along global product lines.
    Initially, Magna and Tesma must confirm that such a combination is viable
and negotiate the form and terms of the transaction, including the basis of
determining relative values. Tesma's board of directors has established a
special committee of independent directors to review the proposed transaction
with the assistance of Tesma management.
    Any transaction would be subject to a number of conditions, including
review and recommendation by Tesma's special committee, approval of definitive
transaction terms by the boards of directors of both Magna and Tesma, and
required regulatory approvals. In addition, under applicable securities laws,
any combination of Tesma and Magna Steyr will require approval by Tesma's
Class A shareholders. Given the preliminary nature of the discussions to date,
there is no assurance that any transaction will result from the discussions or
any subsequent negotiations.
    Since going public in July 1995, Tesma has reported substantial growth,
with sales surpassing Cdn $1.1 billion in fiscal 2000. Tesma, a global
supplier of highly-engineered engine, transmission and fueling systems and
modules for the automotive industry, employs over 4,400 employees in North
America, Europe and Asia in 22 manufacturing facilities and two research
centres.
    Magna Steyr is the industry-leading, one-stop automotive service
provider, offering a full spectrum of vehicle program management and
engineering services under one roof, and is the leading independent assembler
of low volume and niche vehicles. It is also one of the world's most
technology advanced suppliers of total drivetrain technologies, including four
wheel drive systems, for the world's major OEMs. Since Magna's acquisition of
Steyr-Daimler-Puch in 1998, Magna Steyr has been awarded a substantial number
of new powertrain, engineering and complete vehicle assembly contracts for a
variety of OEMs.