Magna announces completion of transaction involving Russian Machines

    AURORA, ON, Sept. 20 /CNW/ - Magna International Inc. (TSX: MG.A; NYSE:  
MGA) today announced that the plan of arrangement and agreements relating to
the strategic investment in Magna by Open Joint Stock Company Russian Machines
became effective today.
    Frank Stronach, Magna's Chairman commented: "We are pleased to have
completed this very important transaction with Russian Machines. I believe we
are now well positioned to capitalize on the growth opportunities in Russia
and other automotive markets, while minimizing the risks of investing in those
    "Our strategic investment in Magna will allow Magna to build a strong
presence in the rapidly expanding Russian automotive market as well as in
Eastern Europe and other key markets," said Oleg Deripaska, Chairman of the
Supervisory Board of Basic Element and Chairman of the Board of Directors of
Russian Machines.
    Under the arrangement, M Unicar Inc. ("Newco"), through its indirectly
owned subsidiary 2143455 Ontario Inc., a Canadian holding company funded by a
subsidiary of Russian Machines, acquired 20 million Magna Class A Subordinate
Voting Shares for approximately US$1.54 billion. Newco is owned indirectly by
the Stronach Trust, Russian Machines and Donald Walker, Siegfried Wolf,
Vincent Galifi, Jeffrey Palmer and Peter Koob, members of Magna's executive
management. Newco and its subsidiaries now hold 726,829 Class B Shares (which
were previously held by 445327 Ontario Inc., all of the shares of which are
directly owned by the Stronach Trust), representing 100% of the outstanding
Class B Shares, and 20,605,000 Class A Subordinate Voting Shares, representing
approximately 15.9% of the outstanding Class A Subordinate Voting Shares,
which collectively represent approximately 68.6% of the total voting power of
all the outstanding shares of Magna. The transaction allows Newco and its
shareholders to effect a strategic investment in Magna and participate in the
future growth and success of Magna on a global basis.
    Magna also announced that, as a result of the arrangement becoming
effective, all of the conditions to its offer to purchase for cash up to
US$1,536,600,000 in value of its Class A Subordinate Voting Shares, which
expires at 5:00 p.m. (Toronto time) today, have been satisfied or waived.
Magna will issue a press release with respect to the outcome of the bid after
it has determined the number of Class A Subordinate Voting Shares which have
been validly tendered and the clearing purchase price for such shares under
the "modified Dutch auction" procedure applicable to the bid.
    We are the most diversified automotive supplier in the world. We design,
develop and manufacture automotive systems, assemblies, modules and
components, and engineer and assemble complete vehicles, primarily for sale to
original equipment manufacturers of cars and light trucks in North America,
Europe, Asia, South America and Africa. Our capabilities include the design,
engineering, testing and manufacture of automotive interior systems; seating
systems; closure systems; metal body and chassis systems; vision systems;
electronic systems; exterior systems; powertrain systems; roof systems; as
well as complete vehicle engineering and assembly.
    We have approximately 83,000 employees in 229 manufacturing operations
and 62 product development and engineering centres in 23 countries.

    This release is for informational purposes only and is not an offer to
purchase or a solicitation of an offer to purchase Magna Class A Subordinate
Voting Shares, nor is it an offer or solicitation of an offer to buy or sell
any other securities of Magna. The substantial issuer bid referred to above is
made solely by means of the Offer to Purchase and the related Letter of
Transmittal and Notice of Guaranteed Delivery, each dated August 13, 2007, as
amended by the Notice of Variation, dated September 6, 2007.

    This press release may contain statements that, to the extent that they
are not recitations of historical fact, constitute "forward-looking
statements" within the meaning of applicable securities legislation.
Forward-looking statements may include financial and other projections, as
well as statements regarding our future plans, objectives or economic
performance, or the assumptions underlying any of the foregoing. We use words
such as "may", "would", "could", "will", "likely", "expect", "anticipate",
"believe", "intend", "plan", "forecast", "project", "estimate" and similar
expressions to identify forward-looking statements. Any such forward-looking
statements are based on assumptions and analyses made by us in light of our
experience and our perception of historical trends, current conditions and
expected future developments, as well as other factors we believe are
appropriate in the circumstances. However, whether actual results and
developments will conform with our expectations and predictions is subject to
a number of risks, assumptions and uncertainties. These risks, assumptions and
uncertainties include, without limitation, those related to the strategic
alliance with Russian Machines, including: the risk that the benefits, growth
prospects and strategic objectives expected to be realized from the investment
by, and strategic alliance with, Russian Machines may not be fully realized,
realized at all or may take longer to realize than expected; we will be
governed by a board of directors on which the Stronach Trust and Russian
Machines each, indirectly, have the right to designate an equal number of
nominees, in addition to the current co-chief executive officers, with the
result that we may be considered to be effectively controlled, indirectly, by
the Stronach Trust and Russian Machines for so long as the governance
arrangements remain in place between them; our Russian strategy involves
making investments and carrying on business and operations in Russia, which
will expose us to the political, economic and regulatory risks and
uncertainties of that country; the possibility that Russian Machines may
exercise its right to withdraw its investment in Newco and 2143455 Ontario
Inc. ("Newco II") and exit from the governance arrangements in connection with
the Arrangement at any time after two years; the possibility that the Stronach
Trust may exercise its right to require Russian Machines to withdraw its
investment in Newco and Newco II and exit from such arrangements at any time
after three years; and the possibility that Russian Machines' lender may
require Russian Machines to withdraw its investment in Newco and Newco II and
exit from such arrangements at any time if such lender is entitled to realize
on its loan to Russian Machines. In addition to the risks, assumptions and
uncertainties related to the proposed strategic alliance, there are additional
risks and uncertainties relating generally to Magna and its business and
affairs, including the impact of: declining production volumes and changes in
consumer demand for vehicles; a reduction in the production volumes of certain
vehicles, such as certain light trucks; the termination or non-renewal by our
customers of any material contracts; our ability to offset increases in the
cost of commodities, such as steel and resins, as well as energy prices;
fluctuations in relative currency values; our ability to offset price
concessions demanded by our customers; our dependence on outsourcing by our
customers; our ability to compete with suppliers with operations in low cost
countries; changes in our mix of earnings between jurisdictions with lower tax
rates and those with higher tax rates, as well as our ability to fully benefit
tax losses; other potential tax exposures; the financial distress of some of
our suppliers and customers; the inability of our customers to meet their
financial obligations to us; our ability to fully recover pre-production
expenses; warranty and recall costs; product liability claims in excess of our
insurance coverage; expenses related to the restructuring and rationalization
of some of our operations; impairment charges; our ability to successfully
identify, complete and integrate acquisitions; risks associated with program
launches; legal claims against us; risks of conducting business in foreign
countries; unionization activities at our facilities; work stoppages and
labour relations disputes; changes in laws and governmental regulations; costs
associated with compliance with environmental laws and regulations; potential
conflicts of interest involving our controlling shareholder, the Stronach
Trust; and other factors set out in our Annual Information Form filed with
securities commissions in Canada and our annual report on Form 40-F filed with
the United States Securities and Exchange Commission, and subsequent filings.
In evaluating forward-looking statements, readers should specifically consider
the various factors which could cause actual events or results to differ
materially from those indicated by such forward-looking statements. Unless
otherwise required by applicable securities laws, we do not intend, nor do we
undertake any obligation, to update or revise any forward-looking statements
to reflect subsequent information, events, results or circumstances or

For further information:

For further information: about this press release or to obtain a copy of
the early warning report that will be filed by Newco with the Canadian
securities regulatory authorities in connection with the transaction, please
contact Vincent J. Galifi, Executive Vice-President and Chief Financial
Officer of Magna at (905) 726-7100, 337 Magna Drive, Aurora, Ontario, L4G 7K1

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