Canada-based auto supplier giant Magna International Inc. today announced it has entered into an agreement to acquire Veoneer’s Active Safety business from SSW Partners for $1.525 billion in cash, subject to working capital and other customary purchase price adjustments. The combined business is projected to generate about $3 billion in sales in 2024, positioning Magna’s ADAS (advanced driver assistance systems) business as a global leader.
The acquisition strengths and positions the combined business with products and capabilities to provide customers with a full suite of ADAS solutions. The acquisition adds significant engineering resources and expands Magna’s ADAS customer base and geographic diversification.
“This acquisition is consistent with our Go-Forward strategy to accelerate investment in high-growth areas, strengthens our ability to deliver systems solutions to meet customer needs, and positions Magna as a leading full-service ADAS provider,” said Magna CEO Swamy Kotagiri. “We plan to accelerate innovation by building on both organizations’ strengths, including customers, suppliers, technology partners, and employees. I am excited to welcome Veoneer Active Safety’s talented employees into our global Magna family.”
The deal broadens Magna’s ADAS sensor and full-system capabilities including radar, camera, ADAS ECU, and driver monitoring. It adds 2200 engineers including 1800 for systems, software, and sensor development.
Veoneer Active Safety sales are projected to be about $1.1 billion in 2022 and grow to about $1.9 billion in 2024. Combined with Magna Electronics, the business is projected to have pro forma ADAS sales of about $1.8 billion in 2022, about $3 billion in 2024, and is expected to generate higher ADAS content per vehicle opportunities.
The transaction is expected to close near mid-year 2023, subject to certain regulatory approvals and other customary closing conditions. Citi and Sidley Austin LLP serve as financial advisors and legal counsel to Magna, respectively.
“Magna is the right long-term home for Veoneer’s Active Safety business,” said Jacob Svanberg, Chief Executive Officer, of Veoneer. “The combination of both businesses creates durable value and accelerates an already exciting growth trajectory for Veoneer’s employees, products, and customers. Until the closing of the agreement, Veoneer continues to execute in its current structure with full focus on customer deliveries, new launches, and continued innovation.”
In April 2022, SSW Partners acquired Veoneer in an all-cash transaction representing a total equity value of $4.6 billion. Qualcomm Inc. subsequently completed the acquisition of Arriver from SSW Partners. With the announcement to sell the Active Safety business to Magna, Veoneer continues the process of finding the best long-term home for its restraint control systems business.
Evercore and Morgan Stanley & Co. LLC acted as financial advisors to Veoneer and SSW Partners. Davis Polk & Wardwell LLP acted as legal counsel and Baker Botts L.L.P acted as regulatory counsel to Veoneer and SSW Partners.
Magna will hold a conference call for interested analysts and Magna shareholders to review the acquisition today at 8:00 a.m. ET. The webcast and slide presentation will be at www.magna.com.
