Magna board to vote on merger with Tesma

VIENNA, Austria - Magna International Chairman Frank Stronach wants to go public with Magna-Steyr, the European division of Canadian supplier Magna International.

Magna International intends to merge Magna-Steyr with the Tesma group, another Magna subsidiary already listed on the Nasdaq and the Toronto stock exchange.

Magna expects to complete the merger by Jan. 1. Magna International has scheduled a shareholder meeting Dec. 6 to vote on the merger.

The new company would be listed as Magna-Steyr.

In the past 12 months, a once

flourishing practice of manufacturers going public to raise capital has ceased as stock valuations fell sharply and investors sold their shares.

Moody's Investors Service recently issued a report saying the automotive supplier segment faced a declining financial climate.

But Stronach believes North American stock markets will have recovered sufficiently from the Sept. 11 terrorist attacks by early 2002 to proceed with taking the merged company public.

Magna plans to apply for listings on Nasdaq and the Toronto exchange in February.

In addition, Magna-Steyr may seek listings later on the Frankfurt and Vienna stock exchanges.

Tesma, in which the Magna group has a 90 percent stake, designs and builds high-tech engines, transmissions and fuel systems.

Tesma has five plants in Europe, 15 in North America and two in South Korea.

Its operations are a logical fit with Magna-Steyr because Tesma has parallel products.

The combined revenue of Magna-Steyr and Tesma is $1.6 billion.

Siegfried Wolf would be chairman of the combined unit. He is president of Magna-Steyr and a vice president of Magna International.

Magna-Steyr, which is based in Graz, Austria, is active in Europe, Mexico, and the United States. It consists of four divisions:

1. Fahrzeugtechnik, which produces cars under contract from other automakers.

2. Engineering, which develops complete vehicles and automotive components for partners.

3. Powertrain, which produces transmissions.

4. Metal Forming, for stamping, pres--sing and hydroforming components.

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