Frank Stronach, chairman of Canadian auto parts giant Magna International , has agreed to release control of the company he built up.

Stronach, 77, arrived in Canada as an immigrant from Austria 50 years ago with just US$200 in his pocket. He built Magna up from what was originally a Toronto tool and die shop.

The company said he would reduce his family’s voting rights from 66% to 7.44% in a deal valued at US$863m.

Stronach said in a statement: “While I am content to maintain the status quo, I understand the potential benefits of management’s proposal, particularly the opportunity to establish a strong foundation for the future.”

The company said the deal was aimed at boosting Magna’s share price – which immediately jumped 16% percent after the proposal. The company has also just announced better-than-expected quarterly results.

Under the deal, the Stronach family trust will swap its 726,829 Class B shares, each carrying 300 votes, for pm newly issued Class A shares and US$300m in cash. Magna would be left with a total of 121m shares outstanding, each carrying one vote.

Under the new ownership structure, Stronach will continue to serve as chairman, but resign as a member of the board’s nominating committee and face the same election process as other directors.

He will also see a gradual cut in consulting fees from 3% of Magna’s pre-tax profits before profit sharing, to 2% by 2014.