Magna Announces Termination of Merger Agreement With Veoneer

Rhea-AI Summary

On October 4, 2021, Magna International Inc. announced that Veoneer, Inc. has chosen Qualcomm's proposal to acquire the company for $37 per share, deeming it superior to Magna's offer. As a result, Veoneer has terminated its merger agreement with Magna and will pay a $110 million termination fee. Magna's CEO highlighted the decision to waive a four-day matching period as a sign of disciplined valuation practices. Magna remains focused on long-term value creation as a leading automotive supplier.

Positive

• Magna's waiver of the matching period demonstrates disciplined valuation strategy.
• The company maintains a strong focus on long-term value creation.

Negative

• Veoneer's decision to accept Qualcomm's offer indicates a competitive challenge for Magna.
• The $110 million termination fee represents a direct financial loss.

• Magna waived four-day matching period to make counterproposal
• Veoneer to pay termination fee
• Decision to waive underscores Magna’s disciplined approach to valuation

AURORA, Ontario, Oct. 04, 2021 (GLOBE NEWSWIRE) -- Magna International Inc. (TSX: MG; NYSE: MGA) today announced that the board of directors of Veoneer, Inc. has determined that the previously announced proposal by Qualcomm Incorporated to acquire Veoneer for $37 per share is a superior proposal under the terms of the previously announced merger agreement between Magna and Veoneer, and that Magna has waived the four-day matching period to make a counterproposal. Accordingly, Veoneer has terminated its merger agreement with Magna and entered into a merger agreement with Qualcomm.

In connection with the termination of the merger agreement with Magna, Veoneer will pay a termination fee of $110 million to Magna.

“Magna’s waiver decision underscores our disciplined approach to valuation as we pursue strategic acquisitions and continue to act in the best interests of our shareholders,” said Swamy Kotagiri, Magna's CEO. “We remain confident in our long-term value creation potential and our path forward as one of the world’s largest automotive suppliers and key enabler to meet future mobility needs.”

TAGS
Veoneer Acquisition, Merger Agreement, ADAS

INVESTOR CONTACT
Louis Tonelli, Vice-President, Investor Relations
louis.tonelli@magna.com, +1 (905) 726 7035

MEDIA CONTACT
Tracy Fuerst, Vice President, Corporate Communications and PR
tracy.fuerst@magna.com, +1 (248) 761 7004

ABOUT MAGNA
Magna is more than one of the world’s largest suppliers in the automotive space. We are a mobility technology company with a global, entrepreneurial-minded team of 158,000 employees and an organizational structure designed to innovate like a startup. With 60+ years of expertise, and a systems approach to design, engineering and manufacturing that touches nearly every aspect of the vehicle, we are positioned to support advancing mobility in a transforming industry. Our global network includes 347 manufacturing operations and 87 product development, engineering and sales centers spanning 28 countries.

For further information about Magna, please visit www.magna.com or follow us on Twitter @MagnaInt.

MAGNA FORWARD-LOOKING STATEMENTS

THIS RELEASE MAY CONTAIN STATEMENTS WHICH CONSTITUTE “FORWARD-LOOKING STATEMENTS” UNDER APPLICABLE SECURITIES LEGISLATION AND ARE SUBJECT TO, AND EXPRESSLY QUALIFIED BY, THE CAUTIONARY DISCLAIMERS THAT ARE SET OUT IN MAGNA’S REGULATORY FILINGS. PLEASE REFER TO MAGNA’S MOST CURRENT MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL POSITION, ANNUAL INFORMATION FORM AND ANNUAL REPORT ON FORM 40-F, AS REPLACED OR UPDATED BY ANY OF MAGNA’S SUBSEQUENT REGULATORY FILINGS, WHICH SET OUT THE CAUTIONARY DISCLAIMERS, INCLUDING THE RISK FACTORS THAT COULD CAUSE ACTUAL EVENTS TO DIFFER MATERIALLY FROM THOSE INDICATED BY SUCH FORWARD-LOOKING STATEMENTS. THESE DOCUMENTS ARE AVAILABLE FOR REVIEW ON MAGNA’S WEBSITE AT WWW.MAGNA.COM. 

FAQ

What happened with Magna and Veoneer on October 4, 2021?

On this date, Veoneer decided to accept Qualcomm's $37 per share offer, terminating its merger agreement with Magna.

What is the termination fee Veoneer will pay to Magna?

Veoneer will pay a termination fee of $110 million to Magna following the agreement's termination.

Why did Magna waive the four-day matching period?

Magna waived the period to maintain a disciplined approach to valuation while focusing on strategic acquisitions.

How does Veoneer's decision impact Magna's future?

Veoneer's choice to partner with Qualcomm presents competitive challenges for Magna's growth strategy and market position.