## Magna to acquire Getrag for approximately €1.75B

##### 16 July 2015

Magna International Inc. signed an agreement to acquire the Getrag Group of Companies for approximately €1.75 billion (US$1.9 billion). This represents an enterprise value of approximately €2.45 billion (US$2.7 billion) less proportionate net debt and proportionate pension liabilities, which together are estimated to be approximately €700 million (US\$762 million) at closing.

Getrag is the world’s largest (by volume) OEM-independent supplier of automotive transmissions, offering a range of transmission systems which include manual, automated-manual, dual-clutch, hybrid and other advanced systems.

In its presentation outlining the acquisition, Magna said growth in the powertrain area, and specifically expansion into transmissions, is a strategic priority in its product portfolio for a number of reasons:

• Powertrain advancement is a key enabler to meet regulations for improved fuel efficiency and lower emissions.

• Every vehicle has and will have a transmission in the foreseeable future.

• Transmissions are highly-engineered products with long product life cycles.

• Alternative transmission development may lead to increased transmission outsourcing to those in technology-leading positions.

Magna said that it believes the architecture of Getrag’s product line is well-positioned to support current and future automotive powertrain configurations; the Getrag product portfolio is based on a layshaft (or countershaft) architecture, which evolved from its manual transmission design. In a layshaft transmission, the torque transfer is done between two clutches, one attached to the first gear path, the second to the second gear path.

Getrag’s current AMT and DCT product lines are platform-based applications of this layshaft MT architecture. EV and PHEV transmissions also uses layshaft architectures; current examples include the Volvo V60; Ford Focus BEV; BMW i8; and Tesla Roadster and sedan.

In addition to its wholly-owned operations, Getrag has significant joint-venture relationships with Ford, as well as Chinese auto makers Jiangling and Dongfeng. Other Getrag customers include BMW, Daimler, Renault, Volvo and Great Wall.

Including joint-venture locations, Getrag has approximately 13,500 employees and operates 13 manufacturing and 10 engineering centers in nine countries in Europe, Asia and North America. Getrag’s 2014 consolidated sales were approximately €1.7 billion, which excludes approximately €1.6 billion in sales generated in its non-consolidated joint-ventures.

The purchase price is subject to working capital and other customary purchase price adjustments. The transaction is expected to close near the end of 2015, subject to a number of conditions including obtaining all necessary regulatory approvals.