[Magna logo] Magna International Inc.
337 Magna Drive
Aurora, Ontario L4G 7K1
Tel: (905) 726-2462
Fax: (905) 726-7164
[Tesma logo] Tesma International Inc.
1000 Tesma Way
Concord, Ontario L4K 5R8
Tel: (905) 417-2100
Fax: (905) 417-2101
JOINT PRESS RELEASE
MAGNA AND TESMA ANNOUNCE AGREEMENT
FOR PRIVATIZATION OF TESMA
December 23, 2004, Aurora, Ontario, Canada -- Magna International Inc. (TSX:
MG.SV.A, MG.MV.B, NYSE: MGA) ("Magna") and Tesma International Inc. (TSX:
TSM.SV.A; NASDAQ: TSMA) ("Tesma") today jointly announced that they have
entered into a definitive arrangement agreement by which Magna would acquire
all the outstanding Class A Subordinate Voting Shares of Tesma not owned by
Magna, to be carried out by way of a court-approved plan of arrangement under
Ontario law. This proposal by Magna to privatize Tesma was previously
announced on October 25, 2004.
Under the terms of the arrangement agreement, shareholders of Tesma will
receive 0.44 of a Class A Subordinate Voting Share of Magna for each Class A
Subordinate Voting Share of Tesma or, at the election of any shareholder of
Tesma, cash based on the volume-weighted average trading price of Magna's
Class A Subordinate Voting Shares on the Toronto Stock Exchange over the five
trading days ending on the last trading day immediately preceding the
effective date of the plan of arrangement. The aggregate cash payable to all
electing Tesma shareholders will be capped at Cdn. $350 million. If
shareholders of Tesma elect to receive cash in excess of Cdn. $350 million in
the aggregate, the total cash available will be prorated among those
shareholders electing to receive cash and the balance of their consideration
will be satisfied in Magna Class A Subordinate Voting Shares.
The Tesma Board of Directors approved the arrangement agreement following
the report and favourable recommendation of its Special Committee of
independent directors established to review and consider the arrangement. In
doing so, the Tesma Board determined that the arrangement is in the best
interests of Tesma and its shareholders, and authorized the submission of the
arrangement to holders of Tesma Class A Subordinate Voting Shares for their
approval as required under applicable law. UBS Securities Canada Inc.
("UBS"), the independent valuator and financial adviser to the Special
Committee, concluded that, as at the close of markets on December 22, 2004,
the consideration being offered to holders of Tesma Class A Subordinate
Voting Shares under the arrangement is fair, from a financial point of view,
to the minority holders of Tesma Class A Subordinate Voting Shares. A copy of
the UBS valuation and fairness opinion, the factors considered by the Special
Committee and Tesma's Board and other relevant background information will be
included in the management information circular/proxy statement that will be
sent to holders of Tesma Class A Subordinate Voting Shares in connection with
the special meeting to be called to consider the arrangement.
Tesma has set a record date of January 1, 2005 for shareholders entitled
to receive notice of the special meeting. Subject to court approval, Tesma
expects to hold the special meeting on February 1, 2005 in Toronto and
expects that the arrangement, if approved, will become effective on February
6, 2005. The arrangement will require approval by two-thirds of the votes
cast by holders of Tesma Class A Subordinate Voting Shares and Tesma Class B
Shares, with each class voting separately. The arrangement also requires the
approval of a simple majority of the votes cast by the minority holders of
Tesma Class A Subordinate Voting Shares. Magna, and parties related to Magna,
including its directors and senior officers, may not vote their Tesma Class A
Subordinate Voting Shares for the purposes of this "majority of the minority"
approval requirement.
The Tesma Board of Directors also today declared a dividend of Cdn. $0.24
per Tesma Class A Subordinate Voting Share and Tesma Class B Share, payable
on or after February 15, 2005 to shareholders of record on February 3, 2005.
Tesma, a global supplier of highly-engineered engine, transmission and
fuel system components, modules and systems for the automotive industry,
employs over 5,700 skilled and motivated people in 28 manufacturing
facilities in North and South America, Europe and Asia, and five focused
tooling, design and R&D centres supporting its three principal product
technology groups: Tesma Engine Technologies; Tesma Transmission
Technologies; and Tesma Fuel Technologies.
Magna, the most diversified automotive supplier 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:
Automotive interior and closure components, systems and modules through
Intier Automotive Inc.; metal body systems, components, assemblies and
modules through Cosma International; exterior and interior mirror and
engineered glass systems through Magna Donnelly; fascias, front and rear end
modules, plastic body panels, exterior trim components and systems,
greenhouse and sealing systems, roof modules and lighting components through
Decoma International Inc.; various engine, transmission and fueling systems
and components through Tesma International Inc.; a variety of drivetrain
components through Magna Drivetrain; and complete vehicle engineering and
assembly through Magna Steyr. Magna has approximately 81,000 employees in
219 manufacturing operations and 49 product development and engineering
centres in 22 countries.
Risks and Uncertainties (Forward-Looking Statements)
- ----------------------------------------------------
This Press Release may contain "forward-looking statements" within the
meaning of applicable securities legislation. Such statements involve certain
risks, assumptions, uncertainties and other factors which may cause actual
future results or anticipated events to differ materially from those
expressed or implied in any forward-looking statements. In the case of both
Magna and Tesma, these factors principally relate to the risks associated
with the automotive industry and include the risks, assumptions,
uncertainties and other factors listed in Item 3 "Description of Business -
Risk Factors" in Magna's Annual Information Form attached as Exhibit 1 to
Magna's Annual Report on Form 40-F for the year ended December 31, 2003, and
Item 9 "Other Factors - Risk Factors" attached as Exhibit 1 in Tesma's Annual
Report on Form 40-F for the year ended December 31, 2003, each filed with the
Ontario Securities Commission and the United States Securities and Exchange
Commission. Unless otherwise required by applicable securities laws, Magna
and Tesma do not intend, nor do Magna and Tesma undertake any obligation, to
update or revise any forward-looking statements to reflect subsequent
information, events, results, circumstances or otherwise.
For further information regarding this press release, please contact at
Magna: Vincent J. Galifi, Executive Vice-President and Chief Financial
Officer, at (905) 726-7100, and at Tesma: Anthony E. Dobranowski, Vice
Chairman and Chief Financial Officer at (905) 417-2155. Alternatively, please
forward e-mail requests to: investorrelations@tesma.com or visit Tesma's
website at www.tesma.com