From Detroit Free Press

TORONTO -- Russian Machines, a subsidiary of Moscow-based Basic Element, plans to invest $1.54 billion in Canadian supplier Magna International Inc. as part of an alliance to pursue growth opportunities in Russia and the surrounding markets, according to a joint statement released this morning by the two companies.

Russian Machines holds an interest in Gaz Group which is Russia's second-largest automotive company. Magna has a unit in Austria that builds vehicles for the Chrysler, Mercedes-Benz, Saab and BMW nameplates.

Magna, which is holding its annual shareholders' meeting today in Toronto, also is considered a leading bidder for the Chrysler Group, the Auburn Hills, MI-based division of DaimlerChrysler AG.

The deal would further Magna's efforts to expand in rapidly developing global markets, Magna said.

"Our partnership will accelerate Magna's growth in Russia and surrounding countries, markets that we see as holding significant opportunities for us," Magna chairman Frank Stronach said in a statement.

The partnership should help Russian Machines keep a leadership position in Russia and expand its presence in Eastern Europe, said Oleg Deripaska, chairman of Basic Element and Russian Machines, in a statement.

"Our partnership with Magna gives us unique competitive advantages and significant growth potential within domestic and neighboring markets," Deripaska said.

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