The Ontario-based auto parts maker says it will pay 1.75 billion euros for Getrag, which has about 13,500 employees and operations in nine countries in Europe, Asia and North America.
Magna says Getrag is a leader in high-growth segments of the transmission industry and has significant joint-venture relationships with Ford as well as two Chinese auto makers that provide significant potential for growth.
"As part of our ongoing product portfolio review, we have identified the expansion of our powertrain business as a strategic priority. Getrag is an excellent fit with this strategy," Don Walker, Magna's chief executive officer, said Thursday.
"Getrag is a technology leader in a product area that we believe is well-positioned to benefit from industry trends that are driving increased vehicle fuel-efficiency and reduced emissions."
Magna said it expects the deal to close near the end of 2015, subject to necessary approvals and adjustments.
It says that the offer values Getrag at about $3.45 billion after accounting for debt and pension liabilities that Magna will assume.