Russian-Canadian deal aims at Chrysler
Cars at a General Motors dealership.
TEXT OF INTERVIEW
LISA NAPOLI: You may never have heard of the young Russian billionaire Oleg Deripaska, but he's got a lot of money — so much that he's pumping $1.5 billion of his money into the Canadian auto parts maker, Magna. Magna says this helps it get a foothold into the Russian market, but business commentator Michael Hlinka of the CBC reminds us that Magna could use the cash for a pretty big investment it wants to make.
MICHAEL HLINKA: Well really you've got to look at this in the context of what Magna is doing overall in its totally strategy. Magna has put in a bid to buy the Chrysler part of Daimler Chrysler.
HLINKA: And the price tag for that is $4.7 billion. Now when Chrysler went on the block originally, the word was that they were looking for $8 billion. So it may have been that Chrysler got back to Magna and said you know $4.7 just isn't enough, we're going to need more before we do the deal. So that's one possible motivation.
NAPOLI: Mmhmm. So this could be great for that deal but it looks like Magna's held pretty steady at not selling itself outright.
HLINKA: Well yes it has. It's one of those sort of fascinating stories about the owner-entrepreneur who builds the company. Like Frank Stronach is a bit of a legend in these parts. He came from Austria sort of with the shirt on his back, started Magna in this tiny garage and now you've got this huge multinational corporation. An incredible, incredible success story.
NAPOLI: Yeah. This Deripaska guy, just to go back to the entrepreneur who's investing all this money in Magna, he seems like quite a character himself.
HLINKA: Ah yes he does, that's one way to put it, quite a character. Look, there's a different culture of doing business in Russia than there is right now in North America, I think we all realize that, and it could be a very interesting partnership.
HLINKA: I'm trying to be nice here.
NAPOLI: (laughs) And it's a hard thing to chew on, the idea of a Russian Canadian American auto maker.
HLINKA: It's really, really strange. So you've got an Austrian-born Canadian who's now with a Russian billionaire to buy one of really the great kind of iconic American companies. Only in the world of business, you can't make this stuff up.
NAPOLI: That's business commentator Michael Hlinka of the CBC.