Magna Says All Canadian Bid For Chrysler In The Works

April 13, 2007
Auto parts firm said it is seeking investment firm Onex Corp. as partner in bid.

Auto-parts giant Magna International Inc. is considering a bid for troubled Detroit auto maker Chrysler, its biggest customer, the Canadian firm said April 13. "Magna has previously commented that, as DaimlerChrysler is one of its largest customers, Magna is seeking a full understanding of the situation regarding the future of the Chrysler Group, and any constructive role Magna may play in a potential transaction."

Making seats, trim, suspension and engine components for virtually every Chrysler vehicle manufactured in North America generates about $3.6 billion for Magna, or about 15% of its annual revenues. In Austria, Magna also builds entire cars for DaimlerChrysler.

Last week, the Globe and Mail newspaper quoted Magna chair Frank Stronach as saying he was wooing investment firm Onex Corp., headed by his friend Gerald Schwartz, to help him launch an all-Canadian bid for Chrysler. "We would make a big commitment," he added, indicating that the offer would be "a big sum." But he would not overpay, saying: "I wouldn't jeopardize Magna."

The Globe and Mail said DaimlerChrysler wants at least $8 billion for Chrysler, but Magna and Onex would also likely have to assume pension and health liabilities topping $15 billion.

Copyright Agence France-Presse, 2007

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