(Toronto) Magna International has signed an agreement to buy Veoneer’s active security business from investment firm SSW Partners for US$1.525 billion in cash.
The Ontario auto parts company said Tuesday the deal adds significant engineering resources and expands its advanced driver assistance systems customer base and geographic diversification.
The acquisition of the Swedish company’s operations will add 2,200 engineers, including 1,800 for systems, software and sensor development, to Magna.
Veoneer’s active safety sales are expected to be approximately US$1.1 billion in 2022.
Magna chief executive Swamy Kotagiri said the deal is in line with the company’s strategy to accelerate investment in high-growth areas.
“We plan to accelerate innovation by leveraging the strengths of both organizations, including customers, suppliers, technology partners and employees,” Kotagiri said in a statement.
Magna had signed a deal to buy all of Veoneer last year but failed to complete the deal after being outbid by SSW Partners and Qualcomm who teamed up to buy the company in a deal valued at US$4.5 billion.
Qualcomm then acquired Veoneer’s Arriver business from SSW Partners for an undisclosed amount.
Veoneer chief executive Jacob Svanberg emphasized that Magna is the right long-term home for the active security business.
“Combining the two businesses creates lasting value and accelerates an already exciting growth trajectory for Veoneer people, products and customers,” said Svanberg.
Veoneer said it was continuing the process of finding the best long-term home for its restraint control systems business.
The sale of the active safety business is expected to close in mid-2023, subject to regulatory approvals and other customary closing conditions.