Auto parts maker Magna International Inc. (MG.TO, MGA) is expected to slim down by selling divisions in coming months, the same style of corporate finance diet that recently boosted profitability and share prices at retailer Canadian Tire Corp. and gold miner Newmont Corp, according to Andrew Willis in a weekend report published in The Globe and Mail.

Will said bankers predict Aurora, Ont.-based Magna will be the next company to embrace what Bay Street calls "carve out" sales by auctioning up to two of its smaller business units: one that manufactures car seats, and a second that makes complete vehicles. The two divisions are expected to sell for a total of about US$1.3-billion, generating cash that Magna can use to scale up its remaining operations, pay down debt and buy back shares.

"We think Magna is more likely to divest businesses it does not consider core to its long-term strategy, which is competing as a market leader," analyst Tom Narayan at RBC Capital Markets said in a report last week. "We could envision a scenario where Magna sells its seating and/or complete vehicle segments."

Magna vice-president Tracy Fuerst said the company's policy is to decline comment on market speculation.

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