Workers assemble car part at a Magna International facility in Markham, Ont.Moe Doiron/The Globe and Mail
Magna International Inc. tumbled the most in more than two years after the auto-parts maker said the offices of its Brazilian unit were visited in connection with an antitrust investigation.
The shares fell 4.9 per cent to $103.43 (U.S.) at 3:36 p.m. in New York after declining as much as 5.8 per cent, the most intraday since June 2012. The Aurora, Ontario-based company's stock had gained 33 per cent this year through yesterday.
The Magna unit was visited by Conselho Administrativo de Defesa Economica, or CADE, Brazil's competition authority, the company said today in a statement. Magna said it's cooperating with the investigation, without giving details of what the agency is probing. Tracy Fuerst, a Magna spokeswoman, didn't immediately respond to calls seeking further comment.
Magna doesn't break out how much of its about $35-billion in annual revenue comes from Brazil or South America. The continent is "the most substantial market" in the company's geographic segment that includes all regions outside of North America and Europe, according to Magna's second-quarter earnings statement. That segment accounted for $2.57-billion in sales last year.
Magna has 10 factories and 3,725 employees in Brazil, where its Cosma International unit operates, according to the company's website. In October 2011, Magna said that the U.S. Justice Department had asked for documents related to tooling bids, including a program in which Cosma was a supplier.
The company said in the second-quarter earnings release that it continued "to focus on reducing operating losses and addressing commercial challenges in South America." Brazil is the region's largest economy.