Veoneer makes advanced driver assistance systems (ADAS) and the deal could push Magna’s ADAS business as a global leader in the industry. ADAS adds automotive features such as collision warning and parking assist. Some systems use collected data from cameras and radar to monitor the surroundings and respond to a situation.
Acquisition to give Magna access to new customers
Magna said that it will acquire all of Sweden-based Veoneer’s issued and outstanding shares for $31.25 per share, which represents $3.8 billion in equity value and an enterprise value of $3.3 billion, which includes Veoneer’s cash, net of debt, and other debt-like items as of March 31, 2021. Along with expanding Magna’s ADAS business, the move is anticipated to give the company access to new customers and regional markets, including Asia. The acquisition is also expected to save Magna about $100 million in annual costs by the year 2024.
Better position to compete with market leaders
The acquisition could also help Magna better compete with market leaders Aptiv, Bosch and Continental. Magna anticipates operating Veoneer’s Arriver sensor perception and drive policy software platform as an independent business unit and acquiring Veoneer’s position in restraint control systems. Once the all-cash transaction is closed, Veoneer will be merged with Magna’s existing ADAS business and integrated into Magna’s electronics operating unit. [coinbase]
