Magna to Acquire Veoneer, Positioning Magna’s ADAS Business as

Magna to Acquire Veoneer, Positioning Magna’s ADAS Business as a Global Leader in a Fast-Growing Industry

Veoneer’s complementary products and capabilities strengthen and broaden Magna’s ADAS portfolio and industry position
Transaction adds significant engineering and software expertise, including in sensor perception and drive policy software
Enhances Magna’s ADAS systems capabilities and feature functionality

AURORA, Ontario and STOCKHOLM, Sweden, July 22, 2021 (GLOBE NEWSWIRE) -- Magna International Inc. (TSX: MG; NYSE: MGA) and Veoneer (NYSE: VNE; SSE: VNE SDB) today announced that they have entered into a definitive merger agreement under which Magna will acquire Veoneer, a leader in automotive safety technology. Pursuant to the agreement, Magna will acquire all of the issued and outstanding shares of Veoneer for $31.25 per share in cash, representing an equity 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.

The acquisition builds on Magna’s strengths and positions the company’s advanced driver assistance systems (“ADAS”) business as a global leader with comprehensive capabilities. The acquisition also expands Magna’s ADAS business with major customers and provides access to new customers and regions, including in Asia. Magna 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, Magna will acquire Veoneer’s leading global position in restraint control systems.

“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,” said Magna CEO Swamy Kotagiri. “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.”

Following the closing of the transaction, Veoneer will be combined with Magna’s existing ADAS business and integrated into Magna’s electronics operating unit. The combined business will build upon relationships with both organizations’ automotive customers, suppliers and technology partners to develop best-in-class products.

Jan Carlson, Veoneer’s Chairman, President & CEO said: “This is a compelling transaction for all stakeholders. It will deliver significant and immediate value to Veoneer stockholders through an attractive premium to our trading price, and provide new opportunities for our employees to join one of the most capable suppliers in the mobility space. In addition, combining forces with Magna will allow the combined business to elevate its status as a full-systems ADAS supplier, which should benefit our customers, supplier partners and ultimately consumers.”

Mr. Kotagiri added, “We have a great deal of respect for Veoneer’s team around the world and their culture of innovation and creativity. We look forward to welcoming Veoneer’s employees into our global Magna family and are confident that together we will be able to achieve great results and move faster to address the growing ADAS market.”

HIGHLIGHTS OF THE TRANSACTION

Creates 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, including perception and drive policy.
Enhances Magna’s ADAS systems capabilities and adds significant engineering and software competency, including Arriver™ sensor perception and drive policy software.
The complementary nature of the two businesses is expected to result in greater ADAS content per vehicle for Magna driven by the opportunity to offer more complete and integrated ADAS systems, inclusive of software.
Strengthens Magna’s customer and geographic diversification in ADAS. The combined entity will have a well-diversified customer base. In addition, Veoneer’s business and footprint in Asia builds on Magna‘s customer and geographic bases in this important region.
Expect to realize annual run-rate synergies of approximately $100 million by 2024. These savings are incremental to Veoneer’s previously announced market adjustment initiatives.
The all-cash transaction will allow Magna to maintain a strong balance sheet with an expected adjusted debt to adjusted EBITDA ratio slightly above the high end of Magna’s 1.0 to 1.5 target range at closing.

TRANSACTION DETAILS AND TIMING
The transaction has been unanimously approved by the Veoneer and Magna boards of directors, and Veoneer’s board of directors unanimously recommends that Veoneer stockholders approve the proposed merger and merger agreement. In addition, Veoneer stockholders AMF, Cevian, AP4 and Alecta, which collectively represent approximately 40% of Veoneer’s outstanding shares of common stock, have either entered into support agreements with Magna or provided indications of support, pursuant to which they have agreed, among other things and subject to certain conditions, to vote their shares of Veoneer common stock in favor of the transaction. A special meeting of Veoneer’s stockholders will be convened in connection with the transaction as soon as practicable after the mailing to Veoneer’s stockholders of the proxy statement in connection with the merger. The transaction is expected to close near the end of 2021, subject to the approval of Veoneer’s stockholders, certain regulatory approvals and other customary closing conditions. The transaction is not subject to any financing conditions.

Citi serves as financial advisor and Sidley Austin LLP serves as legal counsel to Magna. Rothschild & Co and Morgan Stanley serve as financial advisors and Skadden, Arps, Slate, Meagher & Flom LLP serves as legal counsel to Veoneer.

TRANSACTION CONFERENCE CALL
Magna will hold a conference call for interested analysts and Magna shareholders to review the acquisition Friday morning, July 23, 2021 at 7:00 a.m. EDT. The number to use for this call is 1-800-582-0984. The number for overseas callers is 1-416-981-9007. Please call in 10 minutes prior to the call. Magna will also webcast the conference call at www.magna.com.

A slide presentation accompanying the conference call will be available on www.magna.com prior to the call.

For anyone unable to listen to the scheduled call, the rebroadcast numbers are: North America 1-800-558-5253 and overseas 1-416-626-4100 (reservation number is 21996365) and will be available until July 30, 2021.

TAGS
ADAS, Veoneer, acquisition, Arriver™

MAGNA CONTACTS
Investor
Louis Tonelli, Vice President, Investor Relations
louis.tonelli@magna.com, (+1) 905.726.7035

Media
Tracy Fuerst, Vice President, Corporate Communications & PR
tracy.fuerst@magna.com, (+1) 248.761.7004

VEONEER CONTACT
Thomas Jönsson, EVP Communications & IR
thomas.jonsson@veoneer.com, +46.(0)8.527.762.27

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 84 product development, engineering and sales centres spanning 28 countries.

For further information about Magna [(NYSE: MGA; TSX: MG)], please visit www.magna.com or follow us on Twitter @MagnaInt.

MAGNA FORWARD-LOOKING STATEMENTS
Certain statements in this press release constitute "forward-looking information" or "forward-looking statements" (collectively, "forward-looking statements"). Any such forward-looking statements are intended to provide information about management's current expectations and plans and may not be appropriate for other purposes. Forward-looking statements may include financial and other projections, as well as statements regarding our future plans, strategic objectives or economic performance, or the assumptions underlying any of the foregoing, and other statements that are not recitations of historical fact. We use words such as "may", "would", "could", "should", "will", "likely", "expect", "anticipate", "believe", "intend", "plan", "aim", "forecast", "outlook", "project", "estimate", "target" and similar expressions suggesting future outcomes or events to identify forward-looking statements. The following table identifies the material forward-looking statements contained in this document, together with the material potential risks that we currently believe could cause actual results to differ materially from such forward-looking statements. Readers should also consider all of the risk factors which follow below the table:

1 | 2 | 3 Next Page »