Alexa
  • Directory of Taiwan

Magna plan to sell US$1.54B stake to Russian billionaire sails through shareholders

Magna plan to sell US$1.54B stake to Russian billionaire sails through shareholders

A proposal by Canadian auto-parts giant Magna International to sell a large stake in the company to a Russian billionaire for US$1.54 billion (euro1.13 billion) sailed through a special meeting of shareholders Tuesday without any discussion or dissent voiced.
Dissidents, such as the Ontario Teachers Pension Plan, had publicly decried the proposal ahead of the vote, but were unable to muster the strength to defeat Magna's plan.
Even before the votes of those attending a special meeting were in, the proposal was deemed approved.
"Regardless of the ballot, the required majorities of each vote have been cast in favor," Magna executive vice president Brian Colburn told about 75 people at the Design Exchange in the heart of the Bay Street financial district.
The exact tally was not released. That is expected Thursday, when Magna seeks final court approval for the agreement, likely to close Sept. 20.
Under the deal, 39-year-old Russian magnate Oleg Deripaska, who has close ties to Russian President Vladimir Putin, gets the power to nominate six members of a 14-member board of directors of a new company that would control Magna.
"We very pleased that this investment has been approved by Magna's shareholders and that our companies are now more closely and strategically aligned to more efficiently lever our shared strengths," Deripaska said in a statement.
"Our partnership with Magna gives us unique competitive advantages and significant growth potential within domestic and neighboring markets."
The Aurora, Ontario, company founded by Frank Stronach is Canada's largest auto parts maker and a growing assembler of vehicles.
His family trust would nominate another six directors, including Stronach's daughter Belinda Stronach, while the company's top executives occupy the final two seats.
The new company will own 16 percent of Magna's equity but have 69 percent voting control, largely through its ownership of multiple-vote B class shares.
That disparity angered the Ontario Teachers Pension Plan, the third largest pension fund in Canada. On Monday, the fund argued the deal was bad for class A shareholders because it shifts control to the Russian tycoon without benefit to them.
The pension fund, however, owns only a small fraction of Magna's shares and did not have the muscle to block the deal.
Stronach, who began building his empire in 1957, has argued the deal with Russian Machines, owned by Deripaska's Moscow-based Basic Element, will open doors to the burgeoning Russian car market.
Magna has about 83,000 employees in 23 countries.


Updated : 2021-04-22 12:22 GMT+08:00