AURORA, ON - Magna International Inc. ("Magna")
and Decoma International Inc. ("Decoma") jointly announced today that they have
entered into a non-binding letter of intent respecting the purchase by Decoma of the Magna
Exterior Systems group's ("MES") European exterior parts operations and Magna's
existing majority interest in Decoma Exterior Trim Inc. ("Trimco").
acquisition by Decoma would solidify Decoma's position as a premier worldwide supplier of
a full range of exterior automotive parts and components to the world's leading automotive
manufacturers and is in keeping with Magna's previously stated objective of restructuring
its operating groups along global product lines.
The MES operations
are conducted at 7 manufacturing facilities located in Germany, England, Belgium and
Brazil. Trimco, of which Decoma currently owns a 40% interest, currently operates 10
manufacturing facilities which are primarily located in Southern Ontario. MES had revenues
for the prior 12 month period ended December 31, 1999 of Cdn$611 million (US$412 million).
Trimco had revenues for the prior 12 month period ended July 31, 1999 of Cdn$514 million
(US$340 million) and Decoma had revenues for the prior 12 month period ended July 31, 1999
of Cdn$901 million (US$598 million).
The terms of the
proposed transaction, including agreement as to the fair value of the assets to be
transferred and the form of consideration to be paid to Magna, are in the process of
negotiation between Magna and Decoma. In connection with the transaction, Decoma's board
of directors has established a special committee of independent directors to review the
transaction with the assistance of management. The transaction will be subject to a number
of conditions, including the review and recommendation of the proposed transaction by
Decoma's special committee, the approval of final transaction terms by both Magna and
Decoma's boards, required regulatory approvals and the approval of the transaction by a
majority of Decoma's minority shareholders.