Recently, Canada's Magna International and German Getrag signed an agreement that the former will acquire the latter for $ 1.9 billion.
Magna takes Getrag into his pocket
Magna said in a statement that it will invest approximately 1.75 billion euros ($ 1.9 billion) to acquire 100% of Getrag. According to the assessment, including 700 million euros of debt and pension liabilities, Getrag has a market value of approximately 2.45 billion euros. The final transaction price will depend on working capital and other acquisition price adjustment practices.
In terms of progress, Magna and Getrag are expected to complete the transaction by the end of 2015. A series of conditions will determine the actual time point, including obtaining all required legal approvals.
More details of future transactions are yet to be announced by the two companies.
A person familiar with the matter disclosed that Getrag's brand and factory layout will be retained without any layoffs, but it is expected that the two sides will achieve joint effects through joint procurement and other methods to reduce operating costs.
However, Mitra Kotecha, CEO of Getrag, said that the two parties have actually started negotiations for 8 or 9 years. In 2012, after Getrag evaluated how to advance the fundraising plan, the density of negotiations has further increased.
Magna is currently the largest auto parts supplier in North America. In 2014, it ranked second globally in terms of revenue and profit, second only to Bosch and surpassed mainland China and Denso. Rival ZF bought Trina last year, and if the merger is complete, it will compete with Magna for the runner-up title.
Strengthening the transmission business
Magna has accumulated strong strength in the field of transmission systems, and Getrag is one of the largest independent transmission manufacturers, which can further strengthen Magna's transmission business.
According to industry insiders, Magna has become a mainstream supplier in transmission technology such as gearboxes, and Getrag can make Magna's transmission product lineup more comprehensive. Magna also said that Getrag is one of the leading players in the DCT dual clutch gearbox.
In 2014, Magna's powertrain business achieved sales of US $ 5 billion, accounting for approximately 14% of the company's annual operating income. If it can complete the absorption of Getrag, it will rise significantly further. Getrag had revenues of US $ 3.6 billion in 2013, has 23 factories worldwide, and employs 13,500 people.
11 In November last year, Mihir Kotecha had predicted that the company's revenue would reach 5 billion euros by 2019, and China could become its largest market.