Magna International’s shares dropped the most in over two years after the company announced it received a visit at the auto-parts maker’s Brazilian headquarters from the country’s antitrust authorities.
Auto parts suppliers around the world have been subject to numerous monopoly practices investigations in recent years, the most famous being lately the probes initiated by the Chinese authorities. But China’s antitrust enforcement is not singular, with India’s carmakers fined a record amount, Japanese auto suppliers fined and indicted in the US and the EU regulators imposing penalties of more than $1 billion in the past 12 months alone.
Now, the Conselho Administrativo de Defesa Economica, or CADE, BRAZIL’s monopoly watchdog paid Magna’s Brazilian division a visit, with the company cooperating with the authorities on an unspecified antitrust investigation.
Shares of the Aurora, Ontario-based company dropped 4.6% to $103.69 in New York, the steepest fall since June 2012 after the announcement of the probe. The auto parts maker operates in Brazil through its Cosma International unit and has 10 plants and 3,725 employees in Brazil. South America is “the most substantial market” for Magna after North America and Europe, but there is no geographical breakdown on the annual revenue of around $35 billion. The region accounted for sales of around $2.57 billion in 2013.