Fiat Chrysler Automobiles (FCA) has announced it is to sell its Magneti Marelli parts division, ending speculation over what it would do with the business.
The Italian manufacturer has entered a ‘definitive agreement’ with CK Holdings, a holding company of Calsonic Kansei Corporation. Following the sale, the business will be known as Magneti Marelli CK Holdings and will be the world’s seventh-largest global independent automotive components supplier based on total revenues.
The sale, expected to be finalised in the first half of 2019, is subject to regulatory approvals and other customary closing conditions, and represents a transaction value of €6.2 billion. The new business will have combined revenues of €15.2 billion and will employ 65,000 workers.
Commenting on the transaction, Mike Manley, CEO of FCA, said: “Having carefully examined a range of options to enable Magneti Marelli to express its full potential in the next phase of its development, this combination with Calsonic Kansei has emerged as an ideal opportunity to accelerate Magneti Marelli’s future growth for the benefit of its customers and its outstanding people. The combined business will continue to be among FCA’s most important business partners, and we would like to see that relationship grow even further in the future. The transaction also recognises the full strategic value of Magneti Marelli and is another important step in our relentless focus on value creation.”
In its statement, FCA says: ‘The combined company will be well positioned to serve its customers around the world due to its enhanced scale, financial strength and the highly complementary nature of its combined product lines and geographic footprint. The new entity will operate out of nearly 200 facilities and R&D centres across Europe, Japan, the Americas, and Asia Pacific.’
FCA has also agreed to a multi-year Supply Agreement that will further strengthen a mutually beneficial relationship for both Magneti Marelli and FCA’s expanding model range and which will sustain Magneti Marelli's Italian business operations, The combined company will be led by Beda Bolzenius, currently CEO of Calsonic Kansei, based in Japan. Ermanno Ferrari, CEO of Magneti Marelli, will join the Magneti Marelli CK Holdings board.
Beda Bolzenius, CEO of Calsonic Kansei, adds: “Our industry has gone through a fierce change in recent years and the phase to come will be even more dynamic. It is exciting to form a strong platform for Calsonic Kansei and Magneti Marelli to work together and create a competitive automotive supplier that is extremely well placed among the global Top Ten. Together, we will benefit from complementary geographic footprints and product lines, while our respective customers will benefit from increased investment in people, processes and innovative new products.”
The news will end the speculation over what FCA wanted to do with the parts company. In April this year, the manufacturer stated that it wanted to spin-out the business in an attempt to increase the profitability of its car businesses, including Fiat, Alfa Romeo and Maserati. It began plans to create a separate business in August, with the intention of listing Magneti Marelli on the Netherlands stock exchange.