Magna International Inc. (MG) announces the termination of its merger agreement with Veoneer (VNE).
Veoneer determined that the offer from Qualcomm Inc. is a substantially better investment than the one from Magna.
Qualcomm has offered US$37 per share to Veoneer, outbidding Magna's offer of US$31.25 per share.
Due to this, Magna has waived the four-day matching period for a counterproposal. Therefore, Veoneer has terminated its merger agreement with Magna.
According to Swamy Kotagiri, Magna’s CEO, the decision to waive the matching period emphasizes Magna’s approach to valuation.
“Magna’s waiver decision underscores our disciplined approach to valuation as we pursue strategic acquisitions and continue to act in the best interests of our shareholders,” says Kotagiri. “We remain confident in our long-term value creation potential and our path forward as one of the world’s largest automotive suppliers and key enabler to meet future mobility needs.”
In connection with the termination, Veoneer will pay a fee of $110 million to Magna.
Magna is one of the world’s largest suppliers in the automotive space.
Magna International Inc. (MG) is up 0.15 per cent and is trading at C$97.18 per stock at 11:38 a.m. ET.
Veoneer is an automotive technology that designs, develops and manufactures state-of-the-art software, hardware and systems for occupant protection, advanced driving assistance systems, collaborative and automated driving.
Veoneer Inc. is up (VNE) 4.31 per cent and is trading at C$45.32 per stock at 12:13 p.m. ET.