By on July 17, 2015

Getrag

Supplier and sometimes-assembler Magna International will buy German transmission-maker Getrag for roughly $1.9 billion, the Detroit News is reporting.

The deal would firmly plant Canadian-based Magna International as the world’s second-largest parts supplier behind Robert Bosch GmbH and ahead of ZF, which recently purchased TRW Automotive for $12.4 billion earlier this year.

“The trend among the suppliers is that we now have to be bigger as the auto makers go to us to do more for them,” Magna Chief Executive Don Walker told the Wall Street Journal on Thursday.

Magna is well-known for their Austrian subsidiary, Manga Steyr, which assembles cars for BMW including X5 and 5-Series, and will produce vehicles for Jaguar Land Rover.

Getrag produces transmissions for Ford, BMW, Renault, Volvo and Daimler. In addition to its significant contracts with those automakers, Getrag has a substantial business footprint in China that Magna needed, according to the Detroit News. In addition to being the largest automotive market in the world, China is the fastest growing market for dual-clutch transmissions, which Getrag produces.

The acquisition is the latest in a flurry of auto-supplier mergers and purchases. It’s the sixth major deal this year for auto parts suppliers.

Getrag produces about 4 million transmissions annually and employs about 13,500 people in Europe, Asia and North America. Magna generated about $36.3 billion in sales last year and employs around 133,000 people in 29 countries.

Walker told the Detroit News that the company would consider more acquisitions in the near future.

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14 Comments on “Magna Completes $1.9B Acquisition of Transmission-maker Getrag...”


  • avatar
    CJinSD

    Magna-Steyr also developed and builds the Mercedes-Benz G-class. They once also sold thousands of mopeds in the US under the Puch name.

    • 0 avatar
      wmba

      Magna wasn’t even a gleam in Frank Stronach’s eye when Steyr-Puch sold crappy motorcylcles out of the back of Sears catalogs in the early 1960s.

      What point is it you are trying to make?

  • avatar
    deanst

    I guess it’s pick on TTAC day, but why does the headline not agree with the story? The acquisition is not complete – they hope to close by year end.

    • 0 avatar
      johnny ro

      Excellent question.

      I work at a large multinational and cover off business combination accounting; how to account for my company buying another company.

      We have a standard section of our accounting policy memo template, labeled more more less “When was control acquired”. That is the date you start accounting. We always have to do some explaining that deal announcement date was not acquisition date, that the seller was not running it for our benefit from that point onwards, and the deal is uncertain to close until it closes.

      The press releases come out usually same day or +1 after a purchase and sale agreement is signed. Expect maybe 3-6 months to elapse between signing an agreement and actually closing on the transaction.

      I have never had anyone in my company’s press ask me for details. They do mention, “agreed to purchase” or similar so the news releases are not misleading from accounting view if you read the whole release. The M&A folks know this and keep press people in line.

      I am glad Arron Cole got it wrong, as it makes me more valuable to my company. The fewer talented people who want to do what I do (interpret business combinations) the better.

  • avatar
    blueflame6

    It seems entirely possible to outsource an entire automobile company at this point. No need to do anything in house except sign contracts and move money.

  • avatar
    indi500fan

    Did the Jensen-Healey fit that category?

  • avatar
    geozinger

    I’m going to be the misspelling police here but this brings totally incomprehensible images to mind.

    Magna is well-known for their Austrian subsidiary, **Manga** Steyr, which assembles…

    In another lifetime, I was a typesetter. One learned to check their spelling as they typed.

    On another note, when do we think that the Stronach family will finally enter the car business under their own aegis?

    • 0 avatar
      Lou_BC

      geozinger – IIRC they did try to buy Chrysler after DaimlerBenz was offering sloppy seconds.

    • 0 avatar
      ect

      The Stronach family is out of Magna – Frank sold his shares a few years ago.

      The CEO of Magna was married to Belinda Stronach in the early ’90s (he was a VP when they married, iirc). They divorced, and she replaced him as CEO in 2001. He got the job back when she left to go into politics.

  • avatar
    VoGo

    Aaron,
    Magna only ANNOUNCED the transaction. They won’t actually COMPLETE the acquisition until the stock is traded for cash, which is likely about 6 months from now.

  • avatar
    Skink

    I love how the host of “Motorwheek” flops his hands around and calls it,”GET-hragg”.

  • avatar
    HerrKaLeun

    “Getrag produces about 4 million transmissions annually”

    This doesn’t sound a lot in the global car industry. But I assume it is a lot for 3rd party transmissions since many OEM built their own trannies.

    Here a suggestion for an article, the transmission industry and who makes whose transmissions etc. We know most motors are made by the respective OEM, but some are co-developed, or purchased. But we barely know about trannies. I know ZF had developped many of the 8/9 speed transmissions, but they are built by the respective car maker. does ZF built any of them as well? things like that…. I guess that is car and industry nerd stuff :)


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