Supplier and sometimes-assembler Magna International will buy German transmission-maker Getrag for roughly $1.9 billion, the Detroit News is reporting.
The deal would firmly plant Canadian-based Magna International as the world’s second-largest parts supplier behind Robert Bosch GmbH and ahead of ZF, which recently purchased TRW Automotive for $12.4 billion earlier this year.
“The trend among the suppliers is that we now have to be bigger as the auto makers go to us to do more for them,” Magna Chief Executive Don Walker told the Wall Street Journal on Thursday.
Magna is well-known for their Austrian subsidiary, Manga Steyr, which assembles cars for BMW including X5 and 5-Series, and will produce vehicles for Jaguar Land Rover.
Getrag produces transmissions for Ford, BMW, Renault, Volvo and Daimler. In addition to its significant contracts with those automakers, Getrag has a substantial business footprint in China that Magna needed, according to the Detroit News. In addition to being the largest automotive market in the world, China is the fastest growing market for dual-clutch transmissions, which Getrag produces.
The acquisition is the latest in a flurry of auto-supplier mergers and purchases. It’s the sixth major deal this year for auto parts suppliers.
Getrag produces about 4 million transmissions annually and employs about 13,500 people in Europe, Asia and North America. Magna generated about $36.3 billion in sales last year and employs around 133,000 people in 29 countries.
Walker told the Detroit News that the company would consider more acquisitions in the near future.
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