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Fiat Chrysler Automobiles will announce on Monday the sale of Magneti Marelli component manufacturer to a competing component manufacturer owned by KKR for € 6.2 billion, according to two people familiar with the details.
KKR's combination of Magneti and Kalsei's Calsonic will create one of the world's largest component manufacturers, generating combined revenues of $ 17 billion worldwide.
The automotive industry is facing structural changes, with the advent of electric and autonomous technologies threatening the traditional business models of automakers and their suppliers.
The components industry has already experienced several major changes, with the split of Delphi and the fact that Continental is preparing to do the same.
This is the latest in a series of buy-and-build purchases by private equity groups, allowing them to graft synergies and consolidate businesses before reselling. This is the last significant KKR transaction a few months after the acquisition of the Unilever spread division for 7 billion euros.
The new company, which will employ about 65,000 people, will be managed and managed by Calsonic, although Magneti CEO Ermanno Ferrari remains in the new group, according to one of the people.
FCA declined to comment. KKR was not immediately available for comment.
The unloading of Magneti reduces FCA's business portfolio and follows the spin-offs of CNH Industrials, the owner of Ferrari and Iveco-truck, under the direction of the former managing director of the Italian manufacturer Sergio Marchionne.
FCA's plan to sell or register Magneti was complicated by the sudden departure of Mr. Marchionne shortly before his death in July.
advisable
As with all CFA transactions under his mandate, the Italian-Canadian business magnate had been the leader and the driving force of the movement.
The company had prepared to create the division when it received several approaches. Other potential bidders included Apollo Global Management, Bain Capital and the Indian group Mahindra, although KKR has always been the favorite of the division, according to one person.
The new co-chair of the group, Joe Bae, sits on the Board of Directors of Exor, the vehicle that controls the Agnelli family's holdings in FCA and other companies.
The closing of the sale will bring a boon to FCA and will be the first major transaction for the new general manager, Mike Manley, former head of the company's Jeep and Ram brands, who took over this summer.
Exor's president, John Elkann, heir to the Agnelli family empire, has also been more involved in the process since the death of Mr. Marchionne.
Additional report by Javier Espinoza
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