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Tesma Continues U.S. Expansion

4 September 1998

Tesma Continues U.S. Expansion

    CONCORD, Ont., Sept. 3 /CNW-PRN/ - Tesma International Inc. (TSE:TSM.A;
NASDAQ:TSMAF) today announced that it has entered into an agreement to acquire
the Triam Sterling Heights powertrain facility from Magna International Inc.
(TSE:MG.A, MG.B; ME:MG.A; NYSE:MG.A) for a purchase price of $36 million CDN
less certain net indebtedness, plus an earnout of up to $4 million CDN based
on future earnings. The transaction is expected to close within two weeks, and
is subject to the satisfactory completion of due diligence procedures and
formal approval by Tesma's Board of Directors. This acquisition follows
closely on Tesma's initial entry into the United States through its purchase
of Hughes Manufacturing, Inc. in January 1998.
    Triam Sterling Heights is a supplier of powertrain and other components
to the North American automotive industry, and had sales of approximately $27
million U.S. in its latest completed fiscal year. ``This strategic acquisition
enables Tesma to expand our powertrain capabilities in the United States and
will strengthen our position as one of only a few major full service
powertrain suppliers to North American automotive customers. The powertrain
market available to suppliers such as Tesma, is currently estimated to be in
excess of $3 billion,'' stated David Carroll, Tesma's Vice President of
Planning and Corporate Development. ``The Sterling Heights plant currently has
available capacity and some interesting product developments which will result
in increasing levels of sales over the next few years. Current operations of
Sterling Heights, excluding anticipated growth and projected synergies through
association with Tesma, will be accretive to Tesma's operating results. The
costs of the acquisition will be funded almost entirely out of existing cash
balances,'' added Anthony Dobranowski, Tesma's Executive Vice President and
Chief Financial Officer.
    Tesma is a global supplier of highly engineered powertrain, fueling and
cooling 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 3,100
employees in 20 manufacturing facilities in North America and Europe.

    SOURCE  Tesma International Inc.