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Magna and Decoma announce agreement on global exteriors transaction

7 November 2000

Magna and Decoma announce final agreement on global exteriors transaction

    AURORA, ON, Nov. 6 - Magna International Inc. and
Decoma International Inc. jointly announced today that they have
executed an agreement providing for the purchase by Decoma of Magna's European
exterior parts operations and Magna's majority equity interest in
Decoma Exterior Trim Inc. This announcement follows the joint
announcement of the two companies on May 18, 2000 of their non-binding
agreement to effect this transaction.
    This acquisition by Decoma will solidify Decoma's position as a premier
global supplier of a broad range of exterior automotive parts and components
to the world's leading automotive manufacturers. Commenting on the agreement,
Alan J. Power, the President and Chief Executive Officer of Decoma noted,
"This transaction, together with Decoma's recent Conix acquisition, are
important steps in the development of our Company. The transaction will
provide Decoma with expanded geographic markets, manufacturing capabilities,
product offerings and customer relationships while also providing
opportunities for improved operating efficiencies, technology sharing and cost
savings".
    The MES operations to be acquired by Decoma are conducted at
manufacturing facilities located in Germany, England and Belgium. Trimco, of
which Decoma currently owns a 40% equity interest, operates manufacturing
facilities which are located in Southern Ontario. As at July 31, 2000, MES and
Trimco had combined assets of approximately Cdn$540 million. For the 12 months
ended July 31, 2000 they had combined revenues of approximately
Cdn$1.2 billion.
    Subject to currency and other closing adjustments, the aggregate purchase
price payable to Magna is Cdn$300 million, to be satisfied by the issuance of
approximately 8.33 million Class A Subordinate Voting Shares of Decoma priced
at $12 per share and 2 million 5.75% convertible, redeemable, retractable
preferred shares of Decoma at an issue price of Cdn$100 per share. The
preferred shares are convertible into Class A Subordinate Voting Shares at a
conversion price of Cdn$13.20 per share. In addition, Decoma will assume the
debt of MES and Trimco owing to Magna at closing. As at July 31, 2000 this
debt was approximately Cdn$265 million.
    In May, 2000, Decoma's board of directors appointed a special committee
of independent directors to oversee on behalf of Decoma a review of the MES
and Trimco businesses and the negotiation of the purchase agreement. Following
an extensive review and the receipt of a valuation of MES and Trimco and a
fairness opinion in respect of the transaction from an independent financial
advisor, the Special Committee unanimously recommended the approval of the
transaction to Decoma's board of directors. Decoma's board of directors,
following the recommendation of the Special Committee, has unanimously
recommended that shareholders approve the transaction.
    The transaction is subject to the approval by Decoma's minority
shareholders as well as other customary conditions. A proxy circular
describing MES, Trimco and the terms of the transaction will be mailed to
Decoma shareholders shortly in connection with the Annual and Special Meeting
of Shareholders of Decoma scheduled for December 6, 2000. The transaction is
expected to be completed in early January 2001.