FILER: MAGNA INTERNATIONAL INC.
SUBJECT COMPANY: DONNELLY CORPORATION
SEC FILE NO.: 001-09716
[LOGO]
MAGNA INTERNATIONAL INC.
337 Magna Drive
Aurora, Ontario L4G 7K1
Tel (905) 726-2462
Fax (905) 726-7164
[LOGO]
DONNELLY CORPORATION
49 West Third Street
Holland, Michigan 49423
Tel (616) 786-7000
Fax (616) 786-6034
JOINT PRESS RELEASE
MAGNA ANNOUNCES ACQUISITION OF DONNELLY
JUNE 25, 2002, AURORA, ONTARIO, CANADA......MAGNA INTERNATIONAL INC. (TSE:
MG.A, MG.B; NYSE: MGA) and DONNELLY CORPORATION (NYSE:DON) announced today that
they have entered into a definitive merger agreement pursuant to which Donnelly
will become a wholly-owned subsidiary of Magna. The transaction is structured as
a merger of a wholly-owned subsidiary of Magna into Donnelly in which Donnelly
Class A and Class B shareholders will receive Magna Class A Subordinate Voting
shares with a value of U.S. $28 per Donnelly share, provided Magna shares are
trading within the range described below. The purchase price represents total
consideration of approximately U.S.$320 million plus the assumption of
approximately U.S.$95 million of interest-bearing debt.
Donnelly, based in Holland, Michigan, is the second largest global
supplier of exterior and interior mirrors to the automotive industry, with 2001
sales of approximately U.S.$850 million, and has been a leader in the
technological evolution of mirrors through the addition of electronic features.
Following closing of the transaction, Magna intends to combine its mirrors
business with Donnelly, thereby creating the leading global mirrors supplier.
The combined entity, which will operate under the business name of Magna
Donnelly, will have annualized sales of over U.S.$1.2 billion, and will be led
by Dwane Baumgardner, Donnelly's Chairman and CEO.
Closing of the transaction, expected to be late September, is subject to
receipt of antitrust and other regulatory approvals as well as approval of
two-thirds of the votes cast at a shareholders meeting to be called by Donnelly
to approve the transaction. Magna has entered into an agreement with certain
Class A and Class B shareholders of Donnelly representing approximately 72% of
the total votes eligible to be cast at the shareholders meeting, pursuant to
which those shareholders have agreed to vote their shares in favour of the
transaction. Salomon Smith Barney acted as financial advisor to Donnelly.
Donnelly shareholders will receive, for each share of Donnelly stock, a
fraction of a share of Magna Class A Subordinate Voting stock valued at U.S.
$28, so long as the average trading price on the New York
Stock Exchange of Magna Class A Subordinate Voting shares for the twenty trading
days ending on the second day before closing is between U.S.$61 and U.S.$80 per
share.
Belinda Stronach, Magna's President and Chief Executive Officer, commented:
"The combination of our mirrors business with Donnelly is consistent with
Magna's strategy of being a leader in the segments of the automotive industry in
which we compete. The complementary nature of both businesses from a geographic,
operating and customer perspective is expected to achieve significant synergies.
Additionally, Donnelly brings significant technology capabilities applicable not
only to mirrors but to a wider range of automotive electronics."
Dwane Baumgardner, Donnelly's Chairman and CEO, added: "This transaction
brings together two companies with strong customer bases, technology and product
lines. Both companies also have a uniquely close cultural fit. We see tremendous
growth opportunities in all product areas including electronics, mirror systems
and window systems."
Donnelly is a technology-driven, customer-focused automotive supplier that
has been based in Holland, Michigan, since 1905. Through its various product
lines, Donnelly serves every major automotive manufacturer in the world. The
company has more than 6,000 employees in 14 countries worldwide. Donnelly has
been named by the Society of Automotive Engineers as a model company in lean
manufacturing practices and has been recognized by Automotive Industries
magazine as one of the "Best of the Best" suppliers of lighting systems,
electronic systems and interior systems. In addition, Donnelly is nationally
recognized as a leader in the application of participative management principles
and systems. More information on Donnelly is available on Donnelly's website at
http://www.donnelly.com.
Magna, one of the most diversified automotive suppliers in the world,
designs, develops and manufactures automotive systems, assemblies, modules and
components, and engineers and assembles complete vehicles, primarily for sale to
original equipment manufacturers of cars and light trucks in North America,
Europe, Mexico, South America and Asia. Magna's products include: interior
products, including complete seats, instrument and door panel systems and sound
insulation, and closure systems through Intier Automotive Inc.; stamped,
hydroformed and welded metal parts and assemblies through Cosma International;
exterior and interior mirror systems through Magna Mirror Systems; a variety of
plastic parts and exterior decorative systems including body panels and fascias
through Decoma International Inc.; various engine, transmission, fueling and
cooling components through Tesma International Inc.; and a variety of drivetrain
components and complete vehicle engineering and assembly through Magna Steyr.
Magna's non-automotive activities are conducted through Magna Entertainment
Corp.
Magna has approximately 67,000 employees in 174 manufacturing operations
and 43 product development and engineering centres in 19 countries. More
information on Magna is available on Magna's website at http://www.magna.com.
For further information: please contact Vincent Galifi at Magna at (905)
726-7100 or Frank O'Brien at Donnelly at (616) 786-6210.
This press release may contain forward looking statements within the
meaning of applicable securities legislation. Such statements involve certain
risks, assumptions and uncertainties which may cause Magna's and Donnelly's
actual future results and performance to be materially different from those
expressed or implied in these statements. These risks, assumptions and
uncertainties include, but are not limited to: industry cyclicality, including
reductions or increases in production volumes; Magna's and Donnelly's financial
performance; changes in the economic and competitive markets in which Magna and
Donnelly compete; relationships with OEM customers; customer price pressures;
Magna's and Donnelly's dependence on certain vehicle programs; currency
exposure; energy prices; and other factors as set out in Magna's Form 40-F or
Donnelly's Form 10-K for the financial year ended December 31, 2001 and
subsequent SEC filings. Magna and Donnelly disclaim any intention and undertake
no obligation to update or revise any forward-looking statements to reflect
subsequent information, events or circumstances or otherwise.
INVESTORS ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS RELATING TO THE
TRANSACTION THAT IS TO BE FILED WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION
BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION. INVESTORS WILL BE ABLE TO GET
THAT DOCUMENT FOR FREE AT THE COMMISSION'S WEBSITE, www.sec.gov, AND FROM MAGNA
AND DONNELLY, WHEN IT BECOMES AVAILABLE.