Magna International Inc.
23 January 1998
Magna International Inc.
AURORA, Ont., Canada, Jan. 23 /CNW-PRN/ - Magna International Inc.
(TSE:MG.A, MG.B; ME:MG.A; NYSE:MGA) today provided an update on the status of
its previously announced intention to acquire 66.8% of Steyr-Daimler Puch AG
(``SDP'') and 50% of Steyr-Daimler Puch Fahrzeugtechnik Co. KG (``SFT'') from
Creditanstalt AG and its previously announced venture capital fund.
Magna has had ongoing discussions with SDP's and SFT's customers, union
representatives, employees and management and is encouraged by their extremely
positive reaction. This support confirms both the strategic importance and the
timeliness of the transaction, which remains subject to regulatory and board
approvals.
This acquisition significantly enhances Magna's expertise in complete
vehicle engineering and as a result of the unprecedented ability to combine
this with manufacturing and complete vehicle assembly, Magna will have an
expanded opportunity to further a strategic objective to assemble niche
vehicles, specifically for the world's automotive car companies. SFT's
unique capability is reflected in existing contracts to assemble Mercedes Benz
G and E class 4-wheel drive vehicles and Chrysler's Grand Cherokee as well as
through SFT's 49% equity interest in Chrysler's Eurostar Automobilwerk Gmbh &
Co. KG, which assembles Chrysler minivans primarily for the European
marketplace.
Magna also confirmed that it has established its previously announced
venture capital company which will be funded using a portion of the profits
from the sale of its European steering wheel/airbag business in Europe to TRW
which was completed in fiscal 1997. As indicated in the 1997 Magna Annual
Report, the Company's mandate would be to explore investment opportunities,
primarily in non-automotive-related business areas. Mr. Frank Stronach, the
Company's Chairman has been assisting with European acquisitions as well as
assessing potential venture capital projects, permitting senior management to
continue to be focused entirely on the development and expansion of Magna's
core automotive business. As with any venture capital fund, each potential
investment is extensively reviewed by experienced professionals prior to
proceeding. To date only one commitment of approximately Cdn. $5 million has
been made in an automotive related business together with another
institutional investor, with several others having been rejected.
Commenting on the recent news articles regarding Magna's potential
involvement in a theme park project in Austria, Mr. Stronach emphasized that
``the Theme Park project is at a conceptual stage only. Feasibility, business
plans and other studies will take several months to complete before a final
analysis can be completed. Only then would a formal presentation be made to
the Board of Directors. Assuming the project is approved, Magna would only
proceed in concert with other equity investors on a project financed basis
and/or through a separate public company established specifically for this
purpose. Magna's investment in the venture capital company will be limited
for the purpose of these non-automotive investments.''
Magna, one of the most diversified automotive suppliers in the world,
designs, develops and manufactures automotive systems, assemblies and
components primarily for sale to original equipment manufacturers of cars and
light trucks in North America, Mexico and Europe. Magna's products include
exterior decorative systems, interior products including seating systems, door
and other panels, and sound insulation systems, stamped and welded metal parts
and assemblies, sunroofs, electro-mechanical devices and assemblies, various
engine, powertrain and fueling and cooling components, and a variety of
plastic parts, including body panels and fascias.
Magna has over 39,000 employees in 134 manufacturing operations and 27
product development and engineering centres in 11 countries.
SOURCE Magna International Inc.