Magna to Buy Back Control of E-Car

Canada's Magna International Inc. says it intends to pay US$75 million in cash to buy the controlling 27% stake in its E-Car Systems joint venture from a company affiliated with Magna founder Frank Stronach.

The parent company already owns the remaining 73% stake in the maker of lithium-ion batteries, electric drive motors and other components for hybrid and electric vehicles.

Magna granted Stronach control of EV supplier as part of a $1 billion deal in 2010 to buy his family's special class of stock. The exchange also paid them stock, cash and consulting fees. Until then, the Stronachs held two-thirds of Magna's voting rights but only 0.6% of the company's equity.

Some shareholders condemned the transaction as a sweetheart deal with the founder. Magna says the E-Car buyback was negotiated by its independent directors and vetted by independent lawyers, accountants and financial advisors.