Deja Vu All Over Again, Magna Agrees to Acquire Veoneer Active Safety; $83 FVE Unchanged

No-moat-rated Magna has agreed to acquire the active safety (advanced driver assistance systems, or ADAS) business of Veoneer from private equity firm SSW Partners, in a $1.525 billion deal. Including customary regulatory and closing conditions, management expects the deal to close around mid-2023. While it is possible that another bidder might emerge, we think it is unlikely as management stated SSW Partners went through a bidding process. Nor do we see any difficulties in getting regulatory approval because, even though there is some customer and technology overlap, there are still several global Tier I ADAS competitors (besides Magna and Veoneer, at least six by our count) and the acquisition would not place the combined group in a vastly superior market position.