AURORA, ONT. -- Shares of Magna International Inc. jumped higher in early trading after the company announced a deal with LG Electronics to create a joint venture to build components for electric cars.
Shares in the Canadian auto parts company were up $6.92 or about eight per cent at $92.59 on the Toronto Stock Exchange.
Magna said Tuesday the venture will manufacture e-motors, inverters and on board chargers and, for certain automakers, related e-drive systems.
"This partnership fully aligns with our strategy of being at the forefront of electrification and supporting automakers with a diverse and world-class portfolio," Magna president and incoming CEO Swamy Kotagiri said in a statement.
The joint venture tentatively has been called LG Magna e-Powertrain.
Magna says the deal combines its strength in electric powertrain systems and manufacturing with LG's expertise in component development for e-motors and inverters.
The joint venture will include more than 1,000 employees located at LG locations in the United States, South Korea and China.
The agreement is expected to close in July and is subject to a number of conditions including LG shareholder approval.
The joint venture comes as the large automakers move rapidly to develop electric vehicles.
Both Ford Motor and Fiat Chrysler announced this fall that they are moving toward electric vehicle production at some of their Canadian plants.
Magna announced earlier this year that it would be helping to manufacture an electric SUV for startup Fisker Inc. in Europe.
This report by The Canadian Press was first published Dec. 23, 2020
