MOSCOW (AP) - The Russian conglomerate Basic Element is paying $1.54 billion for a stake in the Canadian auto parts maker Magna International Inc., the companies announced Thursday.
The move could give Magna a bigger role in one of the fastest-growing auto markets in the world and help Magna as it looks to acquire U.S. automaker Chrysler from DaimlerChrysler AG.
In a statement, Basic Element and Magna said the Russian company, through its Russian Machines automotive subsidiary, would buy 20 million new Class A voting shares in Magna. The companies didn't say what size stake that would give Basic Element, but a calculation by Dow Jones Newswires put the stake at about 18 percent.
Basic Element will gain the right to appoint six directors to a new, 14-member board at Magna, the companies said.
Russia is one of the world's fastest-growing auto markets and is increasingly being targeted by the giant global manufacturers, looking to offset stagnant markets in the United States and Europe. Russian Machines already controls Russia's second-largest automotive company, OAO GAZ, which makes cars, buses, minivans and trucks. Magna has a joint venture with GAZ to produce some car parts.
The Canadian company also has a partnership deal with Russia's largest carmaker by volume, OAO Avtovaz, that could see the creation of a local joint venture.
The head of state arms exporter Rosoboronexport, which controls Avtovaz, has hinted that a merger with GAZ could be possible in the future. The partnership with Russian billionaire Oleg Deripaska, who owns Basic Element, could give further strength to Magna's push to buy Chrysler.
Magna has confirmed its interest in buying Chrysler and many U.S. analysts have named the Canadian company as the front-runner in the bidding along with partner Onex Corp., a Canadian investment conglomerate.
