Magna to buy Getrag of Germany for $1.9 billionStaff writer ▼ | July 17, 2015
Canadian automotive parts maker Magna International will buy privately-owned German car parts maker Getrag for 1.75 billion euros ($1.9 billion).
Acquisition A strategic priority for Magna
Magna chief executive officer Don Walker said Magna had identified transmissions as a strategic priority, in part because improved powertrains will be crucial to meeting fuel economy targets set by governments around the world.
"Transmissions are highly engineered products with long life cycles, which makes them difficult to commoditize," he said on a conference call.
The deal values Getrag at 8.8 times its expected core earnings, a significant premium to European car parts makers, which trade at an average multiple of 7, according to Reuters data.
Walker noted Untergruppenbach-based Getrag is a technology leader in the product area and indicated its joint venture relationships, especially those in China were an attraction. ■