Magna to acquire majority ownershipIncreases footprint with Honglizhixin from two to 12 manufacturing plantsDemonstrates commitment to grow in the China marketSHANGHAI, Sept. 03, 2020 (GLOBE NEWSWIRE) — Magna has signed an agreement to acquire majority ownership of Honglizhixin (HLZX), a major seat supplier to Chinese automakers. The acquisition will expand Magna’s seating capabilities across China. At the same time Magna will acquire a majority stake in its existing seating joint venture with HLZX.The two companies currently operate a 50/50 joint venture formed in 2015. Magna’s strong relationship with HLZX over the years has enabled agreements to deepen the partnership. Magna has signed a Shareholder Agreement and Share Purchase Agreement and intends to finalize the deals by the beginning of 2021, signaling a strong commitment to the China market.“China is an important market for Magna where we are committed to delivering high quality seat technology to both domestic and foreign automakers, as well as non-traditional startups in the area of mobility,” said John Wyskiel, President, Magna Seating. “HLZX runs an impressive business and we are proud to build upon our existing relationship and strengthen our competitiveness through increased vertical integration, additional manufacturing sites, and full engineering and testing.”The current Magna-HLZX JV includes two manufacturing plants. Under the new ownership agreement, 10 plants will be added to Magna’s manufacturing footprint, adding critical mass and scale to the company’s seating operations in China. The majority of HLZX’s plants are also vertically integrated with just-in-time seat assembly and delivery, structures, foam, and trim capabilities that enable an optimal sourcing solution for automakers versus sourcing from multiple suppliers.“In addition to HLZX’s expansive presence, they have a highly capable and competitive engineering team in providing turnkey solutions to Chinese automakers,” said Jim Chen, Vice President and Managing Director, Magna Seating Asia. “We believe both of our engineering teams working together will provide unique synergies that will allow us to deliver innovative seats to our customers in China.”Magna’s seating business, recognized by automakers and consumers for its innovation and quality, includes six R&D centers and 66 manufacturing operations around the globe.TAGS
automotive seating, automotive seat systems, joint ventures ChinaINVESTOR CONTACT
Louis Tonelli, Vice President, Investor Relations
louis.tonelli@magna.com, (+1) 905.726.7035MEDIA CONTACT
Tracy Fuerst, Vice President, Corporate Communications & PR
tracy.fuerst@magna.com, (+1) 248.631.7004ABOUT MAGNA
We are a mobility technology company. We have over 152,000 entrepreneurial-minded employees, 346 manufacturing operations and 93 product development, engineering and sales centres in 27 countries. We have complete vehicle engineering and contract manufacturing expertise, as well as product capabilities that include body, chassis, exteriors, seating, powertrain, active driver assistance, electronics, mechatronics, mirrors, lighting and roof systems. Our common shares trade on the Toronto Stock Exchange (MG) and the New York Stock Exchange (MGA). For further information about Magna, visit www.magna.com.THIS RELEASE MAY CONTAIN STATEMENTS WHICH CONSTITUTE “FORWARD-LOOKING STATEMENTS” UNDER APPLICABLE SECURITIES LEGISLATION AND ARE SUBJECT TO, AND EXPRESSLY QUALIFIED BY, THE CAUTIONARY DISCLAIMERS THAT ARE SET OUT IN MAGNA’S REGULATORY FILINGS. PLEASE REFER TO MAGNA’S MOST CURRENT MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL POSITION, ANNUAL INFORMATION FORM AND ANNUAL REPORT ON FORM 40-F, AS REPLACED OR UPDATED BY ANY OF MAGNA’S SUBSEQUENT REGULATORY FILINGS, WHICH SET OUT THE CAUTIONARY DISCLAIMERS, INCLUDING THE RISK FACTORS THAT COULD CAUSE ACTUAL EVENTS TO DIFFER MATERIALLY FROM THOSE INDICATED BY SUCH FORWARD-LOOKING STATEMENTS. THESE DOCUMENTS ARE AVAILABLE FOR REVIEW ON MAGNA’S WEBSITE AT WWW.MAGNA.COM.A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/0d7ba813-efc7-493a-80ab-4a7becad7005
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