Veoneer's complementary products and capabilities strengthen and broaden Magna's ADAS portfolio and industry positionTransaction adds significant engineering and software expertise, including in sensor perception and drive policy software
Enhances Magna's ADAS systems capabilities and feature functionality
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
"
Following the closing of the transaction,
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 ArriverTM 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 inAsia 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 toVeoneer'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's1.0 to 1.5 target range at closing.
TRANSACTION DETAILS AND TIMING
The transaction has been unanimously approved by the
Citi serves as financial advisor and
TRANSACTION CONFERENCE CALL
Magna will hold a conference call for interested analysts and Magna shareholders to review the acquisition Friday morning at
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:
MAGNA CONTACTS
Investor
louis.tonelli@magna.com, (+1) 905.726.7035
Media
tracy.fuerst@magna.com, (+1) 248.631.7004
VEONEER CONTACTS
Thomas Jönsson,
thomas.jonsson@veoneer.com, tel +46 (0)8 527 762 27
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 centers spanning 28 countries. For further information about
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:
Material Forward-Looking Statement | Material Potential Risks Related to Applicable Forward-Looking Statement |
Strategic benefits of the transaction, including positioning in complete ADAS system, as well as cameras, radar, domain controllers, perception, motion control and mapping software, and restraint control systems | ** Inherent merger and acquisitions risks, including: unexpected costs, liabilities or delays; inability or failure to achieve intended benefits from the transaction; and/or loss of customers, suppliers, employees or other forms of business disruption; failure to satisfy the conditions to completion of the transaction, including approval of the merger by ** Acquisition integration risks, including the failure to realize anticipated synergies ** Technology and innovation risks, including competitiveness of acquired technologies ** Program launch risks ** Intense competition |
Financial impact of transaction, including Sales diversification, sales growth, content per vehicle opportunities, and expected synergies | ** Same risks as above ** Shifts in consumer take rates ** Potential loss of material purchase order |
Leverage ratio | ** Inherent merger and acquisitions risks, including: unexpected costs, liabilities or delays; inability or failure to achieve intended benefits from the transaction ** Credit ratings changes |
Engineering & software resources and expertise | ** Acquisition integration risks ** Attraction/retention of skilled labour, including failure to retain critical employees of either the acquired business or our own existing business ** |
Forward-looking statements are based on information currently available to us and are based on assumptions and analyses made by us in light of our experience and our perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate in the circumstances. While we believe we have a reasonable basis for making any such forward-looking statements, they are not a guarantee of future performance or outcomes. In addition to the factors in the table above, whether actual results and developments conform to our expectations and predictions is subject to a number of risks, assumptions and uncertainties, many of which are beyond our control, and the effects of which can be difficult to predict, including, without limitation:
Risks Related to the Automotive Industry ** economic cyclicality; ** regional production volume declines, including as a result of the COVID-19 pandemic; ** intense competition; ** potential restrictions on free trade; ** trade disputes/tariffs; Customer and Supplier Related Risks ** concentration of sales with six customers; ** OEM consolidation and cooperation; ** shifts in market shares among vehicles or vehicle segments; ** shifts in consumer "take rates" for products we sell; ** quarterly sales fluctuations; ** potential loss of any material purchase orders; ** a deterioration in the financial condition of our supply base, including as a result of the COVID-19 pandemic; Manufacturing Operational Risks ** product and new facility launch risks; ** operational underperformance; ** restructuring costs; ** impairment charges; ** labour disruptions; ** COVID-19 shutdowns; ** supply disruptions, including with respect to semiconductor chips; ** higher costs to mitigate supply disruptions; ** climate change risks; ** attraction/retention of skilled labour; IT Security/Cybersecurity Risk ** IT/Cybersecurity breach; ** Product Cybersecurity breach; | Pricing Risks ** pricing risks between time of quote and start of production; ** price concessions; ** commodity cost volatility; ** declines in scrap steel/aluminum prices; Warranty / Recall Risks ** costs related to repair or replacement of defective products, including due to a recall; ** warranty or recall costs that exceed warranty provision or insurance coverage limits; ** product liability claims; Other Business Risks ** our ability to consistently develop and commercialize innovative products or processes; ** our changing business risk profile as a result of increased investment in electrification and autonomous driving, including: higher R&D and engineering costs, and challenges in quoting for profitable returns on products for which we may not have significant quoting experience; ** risks of conducting business in foreign markets; ** fluctuations in relative currency values; ** tax risks; ** reduced financial flexibility as a result of an economic shock; ** changes in credit ratings assigned to us; Legal, Regulatory and Other Risks ** antitrust risk; ** legal claims and/or regulatory actions against us; and ** changes in laws and regulations, including those related to vehicle emissions. |
In evaluating forward-looking statements or forward-looking information, we caution readers not to place undue reliance on any forward-looking statement. Additionally, readers should specifically consider the various factors which could cause actual events or results to differ materially from those indicated by such forward-looking statements, including the risks, assumptions and uncertainties above which are:
● discussed under the "Industry Trends and Risks" heading of our Management's Discussion and Analysis; and
● set out in our Annual Information Form filed with securities commissions in
Readers should also consider discussion of our risk mitigation activities with respect to certain risk factors, which can be also found in our Annual Information Form.
Additional Information and Where to Find It
This communication may be deemed to be solicitation material in connection with the proposed acquisition of
Participants in the Solicitation
This document does not constitute a solicitation of proxy, an offer to purchase or a solicitation of an offer to sell any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.
Veoneer Forward-Looking Statements
This document may include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, without limitation, statements relating to the completion of the merger. In this context, forward-looking statements often address expected future business and financial performance and financial condition, and often contain words such as "expect," "anticipate," "intend," "plan," "believe," "seek," "see," "will", "would," "target," similar expressions, and variations or negatives of these words. The reader is cautioned not to rely on these forward-looking statements. Forward-looking statements by their nature address matters that are, to different degrees, uncertain, such as statements about the consummation of the proposed merger and the anticipated benefits thereof. These and other forward-looking statements are not guarantees of future results and are subject to risks, uncertainties and assumptions that could cause actual results to differ materially from expectations those expressed in any forward-looking statements, including the failure to consummate the proposed merger or to make any filing or take other action required to consummate such merger in a timely matter or at all. The inclusion of such statements should not be regarded as a representation that any plans, estimates or expectations will be achieved. You should not place undue reliance on such statements. Risks and uncertainties include, but are not limited to: (i) the merger may involve unexpected costs, liabilities or delays; (ii) the failure to satisfy the conditions to the consummation of the transaction, including approval of the merger by
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