Canadian auto parts maker Magna International Inc said on Thursday it will buy Swedish rival Veoneer Inc for about US$3.8 billion in cash, in a deal that would help expand its driver assistance technologies business.

Magna will buy out Veoneer's outstanding shares for $31.25 each, and the acquisition represents an enterprise value of $3.3 billion including debt, the companies said in a joint statement.

Veoneer's market value was $2.23 billion based on its Thursday closing price, according to Refinitiv Eikon data.

The acquisition will help Magna achieve about $100 million in annual cost savings by 2024, according to the statement.

Stockholm-based Veoneer will be combined with Magna's existing advanced driver assistance systems business.

The deal has been approved by the boards of both companies and is expected to close by the end of this year.

(Reporting by Anirudh Saligrama and Derek Francis in Bengaluru; Editing by Subhranshu Sahu)