31 August 2007
The deal is that Deripaska's firm, Russian Machines, will buy US$1.54 billion in Magna's stock. When the smoke clears, OD through Russian Machines and another company he controls, Stronach Trust, will control 70% of the target's voting shares.
Also, the Toronto Stock Exchange has given its approval to the issuance and listing of the new voting shares the arrangement requires.
Why should you care? Recall that this spring, when Daimler was auctioning off its Chrysler division, Magna was a serious bidder. Deripaska was already then in the market for contgrol of Magna. Although Magna didn't get Chrysler, the fact that the Deripaska deal went forward anyway does illustrate a continuing story of great significance, the consolidation of the automotive and related industries.
Knowledge is warranted belief -- it is the body of belief that we build up because, while living in this world, we've developed good reasons for believing it. What we know, then, is what works -- and it is, necessarily, what has worked for us, each of us individually, as a first approximation. For my other blog, on the struggles for control in the corporate suites, see www.proxypartisans.blogspot.com.