Interiors supplier Magna International Inc. said Tuesday that it plans to acquire automotive mirror maker Donnelly Corp. in a deal valued at $415 million -- $320 million in a stock swap and $95 million in the assumption of Donnelly debt.
Donnelly and Magna said they expect the deal to be complete by late September. The new entity, to be known as Magna Donnelly, will be run as a wholly owned subsidiary of Magna. Dwane Baumgardner, Donnelly's chairman, will run Magna Donnelly.
Magna said it already has reached agreements with Donnelly shareholders representing 72 percent of the total shareholder votes, in favor of the merger.
Under the terms of the deal, for each share of Donnelly stock Magna will give a fraction of a Magna Class A share of stock equivalent to $28.
But the offer is contingent on the average price of the Magna Class A shares ranging between $61 and $80 per share for the 20 trading days prior to the second day before the deal closes.
Donnelly, of Holland, Mich., is the second-largest global supplier of exterior and interior mirrors to the automotive industry. It has about 6,000 employees and locations in 14 countries. It posted global sales of about $850 million in 2001. Donnelly ranked No. 71 on the Automotive News list of top 150 original equipment suppliers to North America, with original equipment sales of $560 million in 2001.
Magna, of Aurora, Ontario, ranked No. 5 on the Automotive News Top 150 list, with North American original equipment sales of $7.14 billion in 2001. It's global original equipment sales of $10.5 billion in 2001 ranked in No. 7 on the Automotive News list of top 100 global original equipment suppliers. It has about 67,000 employees in 19 countries.
Magna largely sat out the acquisition boom of the 1990s as the company dealt with reducing its own debt. But the company has become active within the last year.
In February, Magna agreed to buy the Eurostar vehicle assembly complex in Graz, Austria, from DaimlerChrysler AG. That plant currently builds the Mercedes-Benz M class, all-wheel-drive versions of the Mercedes-Benz E class and the Jeep Grand Cherokee for Europe. Production of the M class is set to be consolidated in Vance, Ala., to make room for production of the Chrysler Voyager minivan.
In April 2001, Magna spun off its $3 billion a year interiors business into the Intier Automotive subsidiary.