Magna to buy Donnelly in $320 million stock deal

TORONTO, June 25 Reuters reported that Magna International Inc., said on Tuesday it will buy Donnelly Corp. , a U.S.-based auto mirror maker, in a $320 million stock-and-debt deal, increasing its clout in the global autoparts industry.

In New York, Magna shares were up 89 cents, or 1.3 percent, to $67.40 a share, while Donnelly rose $7.02, or 34 percent, to $27.25 a share after the deal was announced.

Magna shares rose 83 Canadian cents, or 0.8 percent, to C$101.95 a share on the Toronto Stock Exchange.

Magna, one of the biggest autoparts makers in the world, said in a release that it will pay a fraction of a share of Magna class A subordinate voting share valued at $28 per Donnelly share, worth up to $320 million, as long as the average trading price of Magna on the New York Stock Exchange for the 20 trading days ending on the second day before closing is between $61 and $80 per share.

It will also assume approximately $95 million of interest-bearing debt.

The company also said it has an agreement with Donnelly shareholders who hold 72 percent of the outstanding shares.

"The combination of our mirrors business with Donnelly is consistent with Magna's strategy of being a leader in the segments of the automotive industry in which we compete. The complementary nature of both businesses from a geographic, operating and customer perspective is expected to achieve significant synergies," Belinda Stronach, Magna president and chief executive, said in a release.

The deal, subject to various regulatory approvals, is expected to close in late September. Donnelly will be merged with Magna's mirror division and operate under the business name of Magna Donnelly, with sales of more than $1.2 billion a year.