A Russian billionaire will pour US$1.54 billion into Canadian auto parts giant Magna International Inc., under the terms of a new agreement announced Thursday.

The company, Russian Machines, is owned by billionaire Oleg Deripaska.

The companies announced the deal in a joint statement early Thursday. Under the terms, Deripaska will acquire 20 million Class A subordinate voting shares of Magna.

Frank Stronach -- founder and chairman of the Aurora, Ont.-based Magna -- called the new alliance an exciting opportunity and said the partnership was good news for shareholders because it would "accelerate Magna's growth in Russia and surrounding countries, markets that we see as holding significant opportunities for us."

Deripaska said the alliance will help his company become more competitive in domestic and neighbouring markets.

"I have always admired Magna's technological strengths, its know-how and the talent and professionalism of its people," he said.

"We have already had excellent co-operation in our projects in Russia, and also believe that Magna, as a truly global company, will help us achieve our international goals."

Stronach said he has been looking into expanding into Russia for about a year.

On Wednesday, one day ahead of the announcement, Stronach dismissed rumours that he was preparing to sell the entire company to Russian interests, saying "there would never be a sale."

The deal still has to be approved by the Toronto Stock Exchange. Under the terms, Russian Machines will purchase the 20 million shares for $76.83 each.

A new Canadian entity will be set up for both company's holdings and Magna would continue to be a Canadian-based company listed on the Toronto and New York stock exchanges.

The deal has been approved by Magna's board of directors and is expected to move forward when shareholders meet in the third quarter of this year.

Magna is also bidding to purchase a piece of the Chrysler group.

However, Stronach says the new deal is not linked to the Chrysler talks, but that it is simply a smart business decision to expand into growing markets.

Magna already has a contract with AvtoVaz, another Russian auto maker, to redesign a Lada car.

With files from The Canadian Press