GlobeNewswire Inc | Sep 3, 2020 08:00AM EDT

September 03, 2020

-- Magna to acquire majority ownership -- Increases footprint with Honglizhixin from two to 12 manufacturing plants -- Demonstrates commitment to grow in the China market

SHANGHAI, Sept. 03, 2020 (GLOBE NEWSWIRE) -- Magna has signed an agreement to acquire majority ownership of Honglizhixin (HLZX), a major seat supplier to Chinese automakers. The acquisition will expand Magnas seating capabilities across China. At the same time Magna will acquire a majority stake in its existing seating joint venture with HLZX.

The two companies currently operate a 50/50 joint venture formed in 2015. Magnas strong relationship with HLZX over the years has enabled agreements to deepen the partnership. Magna has signed a Shareholder Agreement and Share Purchase Agreement and intends to finalize the deals by the beginning of 2021, signaling a strong commitment to the China market.

China is an important market for Magna where we are committed to delivering high quality seat technology to both domestic and foreign automakers, as well as non-traditional startups in the area of mobility, said John Wyskiel, President, Magna Seating. HLZX runs an impressive business and we are proud to build upon our existing relationship and strengthen our competitiveness through increased vertical integration, additional manufacturing sites, and full engineering and testing.

The current Magna-HLZX JV includes two manufacturing plants. Under the new ownership agreement, 10 plants will be added to Magnas manufacturing footprint, adding critical mass and scale to the companys seating operations in China. The majority of HLZXs plants are also vertically integrated with just-in-time seat assembly and delivery, structures, foam, and trim capabilities that enable an optimal sourcing solution for automakers versus sourcing from multiple suppliers.

In addition to HLZXs expansive presence, they have a highly capable and competitive engineering team in providing turnkey solutions to Chinese automakers, said Jim Chen, Vice President and Managing Director, Magna Seating Asia. We believe both of our engineering teams working together will provide unique synergies that will allow us to deliver innovative seats to our customers in China.

Magnas seating business, recognized by automakers and consumers for its innovation and quality, includes six R&D centers and 66 manufacturing operations around the globe.

TAGSautomotive seating, automotive seat systems, joint ventures China

INVESTOR CONTACTLouis Tonelli, Vice President, Investor Relations louis.tonelli@magna.com, (+1) 905.726.7035

MEDIA CONTACTTracy Fuerst, Vice President, Corporate Communications & PRtracy.fuerst@magna.com, (+1) 248.631.7004

ABOUT MAGNAWe are a mobility technology company. We have over 152,000 entrepreneurial-minded employees, 346 manufacturing operations and 93 product development, engineering and sales centres in 27 countries. We have complete vehicle engineering and contract manufacturing expertise, as well as product capabilities that include body, chassis, exteriors, seating, powertrain, active driver assistance, electronics, mechatronics, mirrors, lighting and roof systems. Our common shares trade on theToronto Stock Exchange(MG) and theNew York Stock Exchange(MGA). For further information about Magna, visit www.magna.com.

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