Moscow, 21 September 2007 - Parties confirmed the completion of its previously announced US$1.54 billion strategic investment in Magna International Inc., a Canadian company listed on the Toronto and New York Stock Exchanges. Egorov Puginsky Afanasiev & Partners, together with foreign consultants, advised on the deal.
Given that several jurisdictions govern the deal, Egorov Puginsky Afanasiev & Partners involved additional consultants – leading law firms in five jurisdictions, namely: Cravath, Swaine & Moore LLP in New York, Bennett Jones in Toronto, Bryan Cave in London, Schoenherr in Vienne and Van Doorne in Holland.
On 28 August Magna shareholders approved the transaction, clearance was granted from court and regulatory instances in Canada. On September 20, Russian Machines became shareholder in the Canadian auto parts maker and biggest employer in Canada and Austria.
The main challenge facing the Russian automotive industry is its high level of vertical integration. The majority of components are made by the same company that assembles cars.
This system invariably leads to high costs and a lack of flexibility, and, most importantly, it has a negative impact on the quality of Russian technology.
Through its relationship with Magna, Russian Machines gains exposure to Magna's vast experience which will help to create a modern components industry in Russia.
Dimitry Afanasiev, Chairman of Egorov Puginsky Afanasiev & Partners said: “This is a strategic investment that will help to level Russian automotive industry to brand new highs. This strategic partnership will grant international shareholders of Magna benefits from new markets in Russia, CIS and Asia, and it will make Basic Element a leader in the Russian automotive market in Russia. Russia will gain international standards of automotive production”.
Egorov Puginsky Afanasiev & Partners is a leading national law firm in Russia with offices in Moscow, St. Petersburg and London. Founded in 1993, the firm combines extensive emerging markets experience with international professional standards. It regularly represents international companies doing business in Russia and Russian companies going international. The firm regularly acts for the Russian Federation in transactional and litigation matters. The firm also frequently serves as Russian counsel to leading international law firms.
Magna is the most diversified automotive supplier in the world. Magna 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, Asia, South America and Africa. Magna’s capabilities include the design, engineering, testing and manufacture of automotive interior systems; seating systems; closure systems; metal body and structural systems; vision systems; electronic systems; exterior systems; powertrain systems; roof systems; as well as complete vehicle engineering and assembly.
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