Magna will acquire all of the issued and outstanding shares of Veoneer for $31.25 per share in cash, with an enterprise value of $3.3 billion, inclusive of debt. It represents a premium of about 57% to Veoneer's last closing price of $19.93.
Magna expects this acquisition to expand its advanced driver assistance systems (ADAS) business and access new customers and regions, including Asia.
Magna to operate Veoneer's Arriver sensor perception and drive policy software platform as an independent business unit.
In addition, Magna will acquire Veoneer's global position in restraint control systems.
Magna targets to close the all-cash transaction near the end of 2021, after which Veoneer will be combined with its existing ADAS business and integrated into the electronics operating unit.
Through the deal, Magna expects to realize annual run-rate synergies of about $100 million by 2024.
"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," said Magna CEO Swamy Kotagiri.
Magna held $3.5 billion in cash and equivalents as of March 31, 2021.
Price action: MGA shares are trading lower by 1.17% at $83.98, while VNE is trading higher by 55.3% at $30.96 in premarket on the last check on Friday.
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