22 oct 18

FCA sells Magneti Marelli to Calsonic Kansei

Fiat Chrysler Automobiles agreed to sell its high-tech car-parts unit, Magneti Marelli, to Calsonic Kansei for 6.2 billion euro. Magneti Marelli CK Holdings - the name of the new company - will become the world's 7th largest automotive supplier in terms of sales.

FCA says it will close a long-term supply agreement with its former unit, which will remain active in Italy and maintain employment levels. The agreement allows for cust savings through synergies and expansion of its customer base. The company will be headed by Beda Bolzenius, CEO of the Japanese acquirer.

No IPO after all

Instead of listing Magneti Marelli on the Milan stock exchange, FCA decided to sell it off. That seemed the wise thing to do, given the market conditions and global trade tensions. Moreover, both automakers and suppliers have been issuing profit warnings, including Daimler and Continental. 

"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", declared FCA boss Mike Manley. "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".

Calsonic Kansei belongs to KKR, an American investment firm that manages multiple alternative asset classes, including private equity, energy, infrastructure, real estate, credit, and hedge funds. KKR bought most of its shares (41.7 per cent) from Nissan in 2017. 

Authored by: Dieter Quartier