http://www.canada.com/nationalpost/...=035162b4-4e54-44c3-9c37-32077f064b12&k=73197
TORONTO -- Canadian auto parts supplier Magna International Inc. is "seriously considering" the potential purchase of Chrysler, an equity analyst said Monday, citing unnamed sources.
Brett Hoselton, an analyst with KeyBanc Capital, said in a research note that Magna is currently doing substantial due diligence work on Chrysler and is "seriously considering the potential purchase of the company."
Mr. Hoselton said his sources indicate Magna has accessed Chrysler's financials, visited all of Chrysler's facilities, and met with senior bosses of the United Auto Workers.
"We believe that (Magna) management has come to believe that it has reached a plateau as a supplier and niche contract assembler and that increased involvement in the design, research and development of vehicles is the natural progression of its current capabilities."
A Magna official declined to comment on the subject last week, saying the company does not comment on rumours.
Mr. Hoselton said in an interview that his sources are within Magna. He added that he believes a deal will not ultimately be concluded, joining other analysts in expressing reservations about such a deal.
Magna does have the capability to manufacture full vehicles, which it does on a limited basis at a facility in Graz, Austria. But becoming a full automaker would push it into direct competition with two of its biggest clients, Ford Motor Co. and General Motors Corp., making a deal problematic.
DaimlerChrysler AG Chairman Dieter Zetsche said earlier this month all options are open for Chrysler, which lost US$1.5-billion last year. The automaker has hired advisors to contact potential buyers for the Chrysler unit.
nvanpraet@nationalpost.com
TORONTO -- Canadian auto parts supplier Magna International Inc. is "seriously considering" the potential purchase of Chrysler, an equity analyst said Monday, citing unnamed sources.
Brett Hoselton, an analyst with KeyBanc Capital, said in a research note that Magna is currently doing substantial due diligence work on Chrysler and is "seriously considering the potential purchase of the company."
Mr. Hoselton said his sources indicate Magna has accessed Chrysler's financials, visited all of Chrysler's facilities, and met with senior bosses of the United Auto Workers.
"We believe that (Magna) management has come to believe that it has reached a plateau as a supplier and niche contract assembler and that increased involvement in the design, research and development of vehicles is the natural progression of its current capabilities."
A Magna official declined to comment on the subject last week, saying the company does not comment on rumours.
Mr. Hoselton said in an interview that his sources are within Magna. He added that he believes a deal will not ultimately be concluded, joining other analysts in expressing reservations about such a deal.
Magna does have the capability to manufacture full vehicles, which it does on a limited basis at a facility in Graz, Austria. But becoming a full automaker would push it into direct competition with two of its biggest clients, Ford Motor Co. and General Motors Corp., making a deal problematic.
DaimlerChrysler AG Chairman Dieter Zetsche said earlier this month all options are open for Chrysler, which lost US$1.5-billion last year. The automaker has hired advisors to contact potential buyers for the Chrysler unit.
nvanpraet@nationalpost.com
© Financial Post 2007
