Magna International and Veoneer Inc today announced that they have entered into a definitive merger agreement under which Magna will acquire Veoneer, a leader in automotive safety technology, for $ 3.8 billion.
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 Asia.
Magna expects to operate Veoneer’s Arriver sensor perception and drive policy software platform as an independent business unit, consistent with Veoneer’s current practice. In addition, Magna will acquire Veoneer’s leading global position in restraint control systems.
Key takeaways from the acquisition
- It 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 ArriverTsensor 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 in Asia builds on Magna‘s customer and geographic bases in this important region.
- Expect to realise annual run-rate synergies of approximately $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. “We expect the combined entity to be an industry leader in active safety solutions, to enhance its position in complete ADAS systems, and to be well-positioned for the transition towards higher levels of autonomy. The acquisition is also consistent with our go-forward strategy to accelerate investment in high-growth areas.”
Veoneer will be combined with Magna’s existing ADAS business and integrated into Magna’s electronics operating unit. The combined business will build upon relationships with both organisations’ automotive customers, suppliers and technology partners to develop best-in-class products.
Jan Carlson, Veoneer’s Chairman, President and CEO said: “This is a compelling transaction for all our stakeholders. It will deliver significant and immediate value to Veoneer stockholders through an attractive premium to our trading price, and provide new opportunities for our employees to join one of the most capable suppliers in the mobility space. In addition, combining forces with Magna will allow the combined business to elevate its status as a full-systems ADAS supplier, which should benefit our customers, supplier partners and ultimately consumers.”
Kotagiri added, “We have a great deal of respect for Veoneer’s team around the world and their culture of innovation and creativity. We look forward to welcoming Veoneer’s employees into our global Magna family and are confident that together we will be able to achieve great results and move faster to address the growing ADAS market.”