Magna International, Inc. announced Thursday the deal to buy Getrag Group of Companies. The deal amounted to €1.75B or $1.9B and will augment the powertrain business of the Canadian company Magna, offering China a growth platform.
Getrag has approximately 13,500 employees with €1.7B total sales in 2014. The German transmission manufacturer has important joint-venture relationships with Ford Motor Co. and Chinese auto manufacturers Dongfeng Motor Group Co. and Jiangling Motors Corp. Volvo, BMW, Renault SA and Daimler are just a few of its clients.
In a statement released by Magna, the company said that the dual-clutch transmissions market is predicted to be one of the world’s highest growth sections for the next 10 years, where Getrag is the front-runner.
Getrag has been in the transmission manufacturing industry for 80 years, known for a variety of transmission systems, including automated-manual, manual, dual-clutch, hybrid and other sophisticated systems. The company owns 10 engineering and 13 manufacturing centers in nine countries in Europe, North America and Asia. In 2014, it has approximately €1.7B or $1.85B consolidated sales.
The deal, according to Magna International Inc. has an enterprise value of approximately €2.45B, including debt and other liabilities amounting to approximately €700M, which is expected to be finalized by the end of 2015.
Magna has purchased other auto suppliers who fall short of cash after major cutting losses during the downturn. Its latest achievement is the purchase of Getrag.
A capital spending of between $1.3B and $1.5B is the goal of Magna for 2015. The earlier forecast sales this year is between $30.8B and $32.5B.
Grupo Antolin of Spain bought Magna’s interior business for approximately $525M earlier this year.
Don Walker, CEO of Magna International, Inc. said they have recognized that it is a strategic priority to expand their powertrain business.
He said that as a technology front-runner in a product area, the product line of Getrag is beneficial to the present and modern powertrain configurations of automotives. It offers great benefit to the auto industry that will result to better fuel-efficiency and decreased emissions. He pointed out that the joint ventures of Getrag; particularly those in China are a big perk.
Magna International, Inc. is a leading automotive supplier in the world with 316 manufacturing plants, 87 product development, engineering and sales centers in 29 countries. They have about 13,000 employees who aim to deliver superior value through modern processes to customers, as well as offer first-rate manufacturing.