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EU clears Canadian auto parts firm Magna to sell stake to Russian billionaire

EU clears Canadian auto parts firm Magna to sell stake to Russian billionaire

Canadian auto parts giant Magna International won the European Union's blessing Thursday to sell a large stake in the company to Russian billionaire Oleg Deripaska for US$1.54 billion (euro1.13 billion).
The European Commission said it saw no major antitrust problems with the deal, which received shareholder approval on Tuesday. Magna is expected Thursday to seek final court approval for the agreement, likely to close Sept. 20.
Deripaska's Russian Machines competes with Magna for selling interior mirrors to makers of light commercial vehicles in Europe. The Russian company's market share was very limited, regulators said, and the combination would not significantly reduce competition.
Under the deal, 39-year-old Deripaska, who has close ties to Russian President Vladimir Putin, will take a stake in the company estimated at 18 percent and will get the power to nominate six members of a 14-member board of directors of a new company that would control the company.
The Aurora, Ontario, company founded by Frank Stronach is Canada's largest auto parts maker and a growing assembler of vehicles.
The Stronach 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 ownership structure has angered some shareholders. The Ontario Teachers Pension Plan, Canada's third-largest pension fund, argued that the deal was bad for class A shareholders because it shifted control to the Russian tycoon without benefit to them. However, the fund did not have enough 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 : 2021-08-01 10:35 GMT+08:00