Parts company looks to powertrain and Chinese opportunities with deal
AURORA—Magna International has announced it has signed an agreement to acquire the German-based Getrag Group of Companies, one of the largest suppliers of automotive transmissions in the world.
The purchase price for 100 per cent of Getrag is approximately 1.75 billion euros, or $2.5-billion. Magna said the deal represents an enterprise value of approximately 2.45 billion euros, less proportionate net debt and proportionate pension liabilities, which together are estimated to be approximately 700 million euros at closing. The purchase price is also subject to working capital and other customary purchase price adjustments.
“As part of our ongoing product portfolio review, we have identified the expansion of our powertrain business as a strategic priority,” Magna CEO, Don Walker, said. “Getrag is an excellent fit with this strategy. Getrag is a technology leader in a product area that we believe is well-positioned to benefit from industry trends that are driving increased vehicle fuel-efficiency and reduced emissions.”
Getrag, which is headquartered in Untergruppenbach, has an 80-year history in transmissions. It offers a range of transmission systems which include manual, automated-manual, dual-clutch, hybrid and other advanced systems. Magna believes the architecture of Getrag’s product line is well-positioned to support current and future automotive powertrain configurations. The company pointed to Getrag’s position in the growing market for dual-clutch transmissions as particularly strong selling point. The dual-clutch transmission market is expected to be one of the highest growth segments globally over the next decade.
In addition to its 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 centres in nine countries in Europe, Asia and North America. Getrag’s 2014 consolidated sales were approximately 1.7 billion euros, which excludes approximately 1.6 billion euros in sales generated in its non-consolidated joint-ventures.
“Getrag’s joint venture relationships also provide significant growth potential in China, the world’s largest automotive market and the fastest growing market for DCTs. Lastly, Getrag has a highly capable and experienced workforce, including deep powertrain engineering expertise,” Walker added.
The transaction is expected to close near the end of 2015, subject to a number of conditions including obtaining all necessary regulatory approvals.