Magna International and Veoneer jointly announced today that both the companies have entered into a definitive merger agreement under which Magna will acquire Veoneer, a leader in automotive safety technology.
Accordingly, Magna will acquire all of the issued and outstanding shares of Veoneer for $ 31.25 per share in cash, representing a total value of $ 3.8 billion and an enterprise value of $ 3.3 billion, inclusive of Veoneer's cash, net of debt and other debt-like items as of March 31, 2021.
What benefits Magna will accrue on account of this transaction?
The transaction will make Magna a global leader in ADAS with pro forma 2020 ADAS sales of $1.2 billion and capabilities across key component categories, including camera, radar, LiDAR and domain controllers; and software features/functions perception and drive policy. Besides, the complementary nature of the two businesses will increase ADAS content per vehicle for Magna, driven by the opportunity to offer more comprehensive and integrated ADAS systems, inclusive of software. In addition, it will also strengthen Magna's customer and geographic diversification in ADAS by providing access to new customers and regions, including Asia. The deal expects to realise annual run-rate synergies of approximately $100 million by 2024.
Magna said that it expects to operate Veoneer's Arriver sensor perception and drive policy software platform as an independent business unit, consistent with Veoneer's current practice. In addition, the company will acquire Veoneer's leading global position in restraint control systems.
Swamy Kotagiri, CEO, Magna, said, 'Veoneer's complementary technology offerings, customer base, and geographic footprint make it an excellent fit with our ADAS business, and the acquisition strengthens our global engineering and software development talent base. We expect the combined entity to be an industry leader in active safety solutions, to enhance its position in complete ADAS systems, and to be well-positioned for the transition towards higher levels of autonomy. The acquisition is also consistent with our go-forward strategy to accelerate investment in high-growth areas.'
Jan Carlson, Chairman, President and CEO, Veoneer, said this is a compelling transaction for all the stakeholders. Joining forces with Magna will allow the combined business to elevate its status as a full-systems ADAS supplier, which should benefit its customers, supplier partners and ultimately consumers.