Magneti Marelli sale to Calsonic Kansei finalised
03 May 2019
3 May 2019
Fiat Chrysler Automobiles (FCA) has completed the sale of its car parts unit Magneti Marelli to Calsonic Kansei.
The Japanese group has bought the supplier of vehicle parts and service consumables for €5.8 billion, slightly below the initial price agreement of €6.2 billion due to the unit’s changed financial position.
FCA initially agreed last year to sell its parts division to CK Holdings, the parent of Japan’s Calsonic Kansei and a vehicle for US investment company KKR.
This transaction, which has received all the necessary regulatory and anti-trust approvals, combines two successful businesses, with combined revenues of €14.6 billion. The combined entity is the world’s seventh largest independent automotive supplier, based on total revenues, and will operate out of 170 facilities and R&D centres across Europe, Japan, the Americas, and Asia Pacific.
Beda Bolzenius, currently CEO of Calsonic Kansei, based in Japan, will lead the combined business and Ermanno Ferrari, CEO of Magneti Marelli, will join the new Magneti Marelli CK Holdings board.
′We are delighted that today we formally come together as one company. In the last few months, our two companies have spent a lot of time getting to know each other and our respective businesses, and I am very confident and excited about our future potential as one firm,’ said Bolzenius. ′As part of this, our relationship with FCA remains an important one, as we continue to serve them as part of our multi-year supply agreement.’
Reports surfaced last year that FCA was looking to spin out its parts division. The idea was part of a plan by the late Sergio Marchionne to ′purify’ the Italian-American carmaker’s portfolio and to unlock value at Magneti Marelli.
However, a few weeks after this report, KKR began talks over acquiring the business completely rather than becoming a shareholder in the new entity, which was to be floated on the stock exchange. The sale was announced in October 2018.
Commenting on the transaction at the time, 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.
′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.’