VIENNA - The auto industry stood behind Frank Stronach last week. Support from Chrysler, Daimler-Benz, Fiat and other customers gave Magna International control of the Steyr group of companies.
Magna Chairman Stronach was overjoyed, even though last-minute competition for Steyr cost him an extra AS500 million.
Stronach's Magna International agreed to pay AS4 billion ($312 million) for shares owned by Austria's bank Creditanstalt: 66.8 percent of Steyr-Daimler-Puch AG, the assembly company, and 50 percent of Steyr Fahrzeug Technik, the engineering consultancy.
Magna outbid a counter offer from Hannes Androsch, a former Austrian vice chancellor and CEO of Creditanstalt who now is a private investor.
Dana Corp. and Borg Warner Automotive did not place bids, though they had shown last minute interest.
'Magna made the best bid,' said Karl Samstag, vice chairman of Creditanstalt's supervisory board.
'This is the best solution for Steyr,' he said. 'As a member of a powerful automotive corporation like Magna, Steyr will be able to give secure jobs to its workforce.'
Stronach said the offer he made on 9 January of AS3.5 billion was based on the 1996 balance sheet.
He said preliminary figures of 1997 business showed great improvement and made it possible to increase his offer.
Creditanstalt delayed its sale to Magna for two weeks.
Meanwhile, counter offers were weighed, the press speculated and share prices rose to AS483. Speculators are going to lose out. Magna is paying only AS329 for its shares.
A counter bid by the German-Austrian investment firm GSM was withdrawn. It had the appearance of a political bid meant to make things difficult for Creditanstalt and its owner, Bank Austria.
GSM's bid had raised the question of conflict of interest for Gerd Randa, president of Bank Austria and chairman of Creditanstalt. Randa is also on the board of Magna Holdings Europe. Stronach noted that Randa was not present when Creditanstalt decided to sell.
Chrysler Corp., the 50 percent partner with Steyr in the Eurostar factory making Chrysler Voyagers, had a veto on the deal. Its contract says Creditanstalt could sell its shares only if Chrysler agreed.
Stronach stressed that he not only had Chrysler's written consent, but that Chrysler and customers Daimler-Benz, BMW and VW Audi all urged Creditanstalt to sell to Magna. Stronach praised his European CEO, Siegfried Wolf, who conducted the talks with Creditanstalt.
One man left out of the general joy in Austria is Rudolf Streicher, president and chief executive officer of Steyr-Daimler-Puch.
Earlier, Stronach had asked Streicher to be chairman of Magna's European supervisory board. Now it appears he will not.
Streicher said he will resign at the annual general meeting expected to be scheduled in May or June.
Steyr went from losses to profit under Streicher, and he has a good reputation in the company, but he appears to be out of favor now. He was left out of all discussions over the past several weeks.
Androsch's offer may have disturbed the atmosphere between Stronach and Streicher. Streicher is an old friend of Androsch and was a member of his team of young astute managers when Androsch took over the ministry of finance many years ago.
Streicher maintains a loyal face.
'Steyr-Daimler-Puch now has a very good majority owner,' he said. 'It is absolutely possible that the association with Magna will open new vistas for Steyr. Both produce completely different products and so it will be possible to supply the complete car and its parts.'