Canada’s Magna International Inc. announced today that it is acquiring Swedish safety technology provider Veoneer for $3.8 billion. The move, expected to close by the end of 2021, will give Magna added engineering and software expertise, as well as enhance its sensor perception and drive policy software business.
Magna has its local headquarters in Troy and 13 other manufacturing and technology centers in metro Detroit, and six more throughout Michigan. Veoneer has 1,100 employees in the U.S., at facilities in Southfield; Lowell, Mass.; and Goleta, Calif.
According 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.
The acquisition expands Magna’s position in the advanced driver assistance systems (ADAS) market giving it more comprehensive capabilities, the company says. The acquisition also gives Magna’s ADAS business 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,” says Swamy Kotagiri, CEO of Magna. “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.
“This is a compelling transaction for all stakeholders,” says Jan Carlson, chairman, president, and CEO of Veoneer. “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.”