Magna International (TSX:CT) & LG Join Hands To Produce EV Parts

2 min read | December 24, 2020 01:43 AM AEDT | By Team Kalkine Media

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Auto parts producer company Magna International and South Korean electronics company LG Electronics Inc have entered a joint venture (JV) to develop electric-car parts. Magna will hold a 49 per cent ownership in the S$ 453-million JV while LG Electronics will have the majority stake, as per its exchange filing. The JV will build e-motors, inverters, and other electric vehicles’ components in Incheon, Korea, and Nanjing, China, said media reports on December 23.
The new venture will employ more than 1,000 staff at LG offices in the US, China, and South Korea. The deal is expected to conclude in July 2021, after getting LG stockholders' approval and other required regulatory consents.
Magna stocks are already trading in the green while LG Electronics scrips rocketed 30 per cent on the back of this news. Both the companies are pursuing to capitalize their resources to join the global EV rally.
The EV transition also has triggered a bull run among EV leaders such as Tesla Inc. and Chinese emerging EVs Nio Inc. and XPeng Inc.
Magna International is a large-cap company with a current market cap of nearly C$ 25.64 billion. Its stocks offer a present return on equity (ROE) of 4.42 per cent. The automotive firm stock is trading with a current stock price of C$ 85.67 per unit, as per TMX data.

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