FCA releases Magneti Marelli, parts supplier, for $ 6.5 billion

Fiat Chrysler Automobiles announced Thursday that it has sold the Italian-based Magneti Marelli parts supplier subsidiary to the Japanese holding company CK Holdings, itself the parent company of the competitive automotive parts supplier Calsonic Kansei. Magneti Marelli and Calsonic Kansei are in fact almost the same size in terms of annual global sales, at $ 9.2 billion and $ 9.1 billion respectively. News from the automobile.

The general director, Beda Bolzenius, said in a statement: "We are delighted that today we formally form one and the same company. In recent months, our two companies have spent a lot of time getting to know each other and their respective businesses. I am very confident and excited about our future potential as a company. In this context, our relationship with FCA remains important as we continue to serve it under our multi-year supply agreement. To be able to serve our customers as a single company, integration is a key priority, both culturally and operationally. We will coordinate our efforts to focus on creating a globally diverse, top-tier supplier that our customers and employees can be proud to be part of. "

The newly formed company Magneti Marelli CK Holdings Co., Ltd. has actually doubled in size with the addition of the Italian company. Magneti Marelli currently operates around 86 manufacturing plants and 12 R & D centers worldwide, while Calsonic Kansei controls 58 additional plants. Both companies supply a number of parts to OEMs around the world and will likely be able to pool their resources to streamline economies of scale. The newly formed partnership is now the seventh largest supplier of parts in the world.

The sale was worth US $ 6.5 billion to the transaction, which is less than the $ 7.1 billion expected, although the value of the parts supplier declined over the life of the sale. More than a third of this injection of funds was diverted to a stock dividend of $ 1.45 per common share. Since payments will be made at the end of the month, it is hoped that this will boost the desirability of CFA shares and share prices.

"We thank Magneti Marelli's employees for their commitment to providing innovative products while supporting FCA's business goals," said FCA Managing Director Mike Manley. "FCA remains committed to Magneti Marelli as the new company remains a key supplier, and I am confident that this transaction will ensure a bright future for their employees and other stakeholders. The sale also recognizes Magneti Marelli's strategic value, improving our financial position, delivering value to our shareholders and enabling us to better target our core product portfolio. "

There is no point in helping the CAF record massive declines in sales. The extra billions of dollars are therefore unlikely to affect the bottom line of the company. The disadvantage is that the manufacturer has yet to buy these parts to Magneti Marelli and no longer benefit from them.