Magna terminates merger agreement with Swedish tech company Veoneer
The auto parts company says it waived a four-day matching period to make a counter-proposal after an offer by Qualcomm was ruled to be a superior proposal.
Magna International Inc. is terminating its merger agreement deal to buy Swedish tech company Veoneer Inc. after its offer was topped by chip maker Qualcomm Inc.
In an Oct. 4 news release, the Aurora, Ont.-based automotive parts company says it waived a four-day matching period to make a counter-proposal after the Qualcomm offer was ruled to be a superior proposal.
Magna announced a deal to buy Veoneer in July for US$31.25 per share for a total value of US$3.8 billion. However, Qualcomm stepped in with an offer of US$37 per share for a total value of about US$4.5 billion.
In the news release, Magna CEO Swamy Kotagiri says the company’s decision underscores its disciplined approach to valuation as it pursues strategic acquisitions. “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,” he said.
In connection with the termination of the merger agreement with Magna, Veoneer will pay a termination fee of US$110 million.