MOSCOW - A Russian metals firm owned by oligarch Oleg Deripaska will buy a 1.54-billion-dollar (1.13-billion-euro) stake in Magna, the companies said on Thursday, just as the Canadian company prepared to buy US carmaker Chrysler.
Basic Element, Deripaska's holding company, "would invest approximately 1.54 billion dollars to indirectly acquire 20 million" shares in Magna, Basic Element and Magna said in a joint statement.
The stake is equivalent to around 15 percent of Magna International, according to an AFP calculation. The company will continue to be listed on the Toronto and New York stock exchanges.
The deal still needs to get the go-ahead from the Toronto stock exchange, shareholders and various Canadian legal entities.
"This investment will accelerate Magna's strategic efforts to capitalize on the growth opportunities within the Russian and other automotive markets," the companies said.
Russia's car market is booming, with the number of cars sold here rising by 20 percent between 2005 and 2006.
"Our partnership with Magna gives us unique competitive advantages and significant growth potential within domestic and neighbouring markets," Oleg Deripaska, chairman of Basic Element, said in the statement.
Magna International is the only serious candidate to buy Chrysler, the loss-making US unit of German-US car giant Daimler Chrysler, a specialist German weekly, Automobilwoche, said earlier this month.
The takeover is expected to take place by the end of this month and Magna International is prepared to pay 4.5 billion dollars for Chrysler, various news reports said.
05/10/2007 11:49 GMT