Magna International subsidiary Magna Steyr has formally concluded its previously announced agreement to acquire the Eurostar vehicle assembly facility from DaimlerChrysler, with the deal expected to finalise in July, 2002 subject to regulatory approvals. Magna Steyr’s president and CEO Siegfried Wolf said: “Our long-term strategy is to become the largest specialty brand vehicle manufacturer for various OEM customers in the global automotive industry.
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“Magna Steyr is well-positioned to capitalize on one of the biggest trends in the automotive industry – namely, the increased outsourcing of low volume and niche vehicle engineering, development and assembly.” The Eurostar acquisition will double Magna Steyr’s vehicle assembly capacity to more than 200,000 vehicles per year. The company currently assembles the Jeep Grand Cherokee and a number of Mercedes-Benz models including the M-class, and is currently developing a new Saab convertible with assembly production scheduled to begin next year. In October, 2001, Magna Steyr signed an agreement with BMW to develop and manufacture the company’s new X3 sport activity vehicle for the global market. As a result of the Eurostar acquisition, both Magna Steyr and Tesma International have agreed not to proceed with their previously proposed merger. Magna president and CEO Belinda Stronach said: “Given the fundamental changes that have taken place in the last few months, the decision for Magna Steyr and Tesma to pursue separate growth strategies is the optimal one at present. “There is still an understanding that the two companies will cooperate in the sharing of resources and expertise to take advantage of the relationships developed during the merger negotiations and to realise some of the cross-group benefits and synergies that were discussed in the original merger transaction. “The increased vehicle project management and assembly contracts awarded to Magna Steyr provides increased opportunities to source more parts content from Magna’s other automotive systems companies and groups,” Stronach added.
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