Magna shares slump on U.S. antitrust probe
Magna said the DOJ had requested documents related to various tooling bids, including a program for which a subsidiary within its Cosma International unit acted as tier 1 tooling supplier.As the investigation is related to tooling program bids, “any potential impact would likely be limited as tooling is a small part of Cosma’s overall business,” said CIBC analyst Michael Willemse.Tooling, which is the equipment used to make auto parts, makes up about 8 percent of Magna’s sales and a smaller portion of its profits, CanaccordGenuity analyst David Tyerman said.”It seems unlikely that any fine would be large enough to materially impact the company, given that it has $1.7 billion in cash currently,” Tyerman said.Other autoparts manufacturers that are being investigated for possible antitrust activities by the DOJ include TRW Automotive Holdings Corp (TRW.N) and Autoliv Inc (ALV.N).Magna’s shares were down C$2.21 at C$36.75 on the Toronto Stock Exchange on Thursday morning. In New York, the stock was down $2.50 at $35.84.
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