Magna Completes Acquisition of New Venture Gear

On September 29, 2004, Magna International Inc. completed the acquisition of the worldwide operations of DaimlerChrysler Corp.’s wholly-owned subsidiary, New Venture Gear, Inc. (NVG). The transaction involved the creation of a new joint venture—named New Process Gear, Inc., which is initially owned 80 per cent by Magna and 20 per cent by DaimlerChrysler—that operates a manufacturing facility in Syracuse, New York. Magna will acquire DaimlerChrysler’s interest in New Process Gear in September 2007. The transaction also involved Magna’s acquisition of certain other US and European assets of NVG, including a manufacturing facility in Roitzsch, Germany and a research and development centre and sales office in Troy, Michigan. The purchase price for 100 per cent of the NVG business was approximately US$431 million, subject to post-closing adjustments.

In connection with the NVG acquisition, Magna also issued senior unsecured zero-coupon notes for an aggregate issue price of C$365 million and an aggregate amount due at maturity of C$415 million. The notes were sold in Canada on a private placement basis, and the sale was underwritten by BMO Nesbitt Burns Inc. and UBS Securities Canada Inc.

Magna was represented in-house by Jeffrey Palmer, executive vice-president, and Bassem Shakeel and Peter Kalins, legal counsel. With respect to the NVG acquisition, they were assisted by Sidley Austin Brown & Wood, with a team that included Scott Freeman, Jennifer Richards and Casey Kobi (corporate), Paul Wysocki and Shamir Merali (tax), Maureen Crough (environmental), Rob Hardy (employment) and Michael Federman (real estate); and by Osler, Hoskin & Harcourt, with respect to the sale of the notes, with a team that included Doug Bryce, Rob Lando and Peter Simeon (corporate) and Firoz Ahmed and Tim Hughes (tax).

DaimlerChrysler was represented in-house by Holly Leese, and by Debevoise & Plimpton, with a team that included Paul Wilson, Jr., Ezra Borut and Eva Riesenhuber (corporate), Burt Rosen and Cecile Beurrier (tax), Charles Wachsstock (benefits), Stuart Hammer (environmental), Peter Irwin (real estate) and Judith Church (intellectual property); and by Fasken Martineau DuMoulin, with a team that included Barbara Miller and Georges Dubé.

The underwriters of the sale of notes were represented by Davies Ward Phillips & Vineberg, with a team that included Carol Pennycook and Patrick Moyer (corporate/securities), and Colin Campbell and Raj Juneja (tax).