Magna International Inc. has settled a 20-year-old lawsuit that sought damages of $2.6-billion against the company after it sold its airbag business in 1997.
Magna has agreed to pay $25-million to Windsor, Ont.-based companies Centoco Holdings Ltd. and KS Centoco Ltd., and relinquish a 23-per-cent stake in steering-wheel manufacturer KS Centoco as part of the settlement.
The settlement, which includes other terms that are confidential, comes about a month before a trial was set to begin and eliminates a contingent liability that Magna outlined for two decades in footnotes of its annual reports and quarterly financial statements.
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"The impact of the settlement on Magna's financial condition and results of operations is not significant," Magna said in a three-sentence news release issued late Friday afternoon.
Magna owned 23 per cent of KS Centoco, while Centoco Holdings, then owned by the Toldo family of Windsor, held 77 per cent.
After Magna sold its airbag business to TRW Inc. in 1997 for $570-million, KS Centoco and Centoco claimed the deal cut them out of rights they had to use a Gemany-based company's airbag technology.
Magna sold 80 per cent of the airbag business to TRW, then set up a strategic alliance with that company as airbag use grew.
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ZF Friedrichshafen AG of Germany acquired TRW in 2015.