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Magna International Inc Class A MGA

Morningstar’s Analysis

Valuation
Currency in USD

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

Magna Agrees to Acquire Veoneer for $31.25 per Share

Richard Hilgert Senior Equity Analyst

Analyst Note

| Richard Hilgert |

No-moat rated Magna announced a definitive agreement to acquire narrow moat rated Veoneer for $31.25 per share. Management expects the deal to close before the end of 2021. While it is possible that another bidder might emerge, we think it is unlikely. Neither do we see any difficulties in getting regulatory approval. Magna and Veoneer were both highlighted in our November 2020 Automotive Observer, “Suppliers to Autonomous Driving Technology”. We estimate combined proforma 2021 revenue in advanced driver assistance systems to be roughly $2 billion.

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Company Profile

Business Description

Magna International prides itself on a highly entrepreneurial culture and a corporate constitution that outlines distribution of profits to various stakeholders. This automotive supplier's product groups include exteriors, interiors, seating, roof systems, body and chassis, powertrain, vision and electronic systems, closure systems, electric vehicle systems, tooling and engineering, and contracted vehicle assembly. Roughly half of Magna's revenue comes from North America while Europe accounts for approximately 44%.

Contact
337 Magna Drive
Aurora, ON, L4G 7K1, Canada
T +1 905 726-2462
Sector Consumer Cyclical
Industry Auto Parts
Most Recent Earnings Mar 31, 2021
Fiscal Year End Dec 31, 2021
Stock Type
Employees 158,000

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