Magneti Marelli
Magneti Marelli Powertrain Reliability Lab, Italy

FCA Cancels Negotiations on Auto Parts Sale

Sept. 18, 2018
Plans to sell Magneti Marelli to a private equity group have ended because the offer failed to reach FCA’s $7B target

Fiat Chrysler Automobiles will seek other options in its plan to sell off Magneti Marelli, the automotive parts manufacturing business it now controls as a wholly owned subsidiary. A bid by private-investment syndicate KKR & Co. fell short of the $7 billion FCA had sought, according to reports, causing the automaker to cancel the exclusive negotiations it had entered with the, according to published reports.

FCA and KKR have not confirmed the reports. The status of other bids for Magneti Marelli is uncertain.

Magneti Marelli has 86 manufacturing plants and 14 research centers worldwide, with a total of 43,000 employees. Its product lines range among automotive lighting, powertrain, electronic, suspension, and exhaust systems, as well as plastic components and aftermarket parts. The brand names in its portfolio include AL-Automotive Lighting, Cromodora, Cofap, Ergom Automotive, Jaeger, Mako Elektrik, Vitaloni, Weber, and several others.

FCA had intended to offer spin-off the group to its shareholders, according to the group’s late chairman Sergio Marchionne. Fiat Chrysler directors approved such a spin-off plan in April of this year. The prospect of a sale to KKR emerged in late summer.

KKR is a global investment fund with multiple asset classes. Among its holdings is Calsonic Kansei Corp., an auto parts group that KKR acquired from Nissan Motor Co. in 2017 for about $4.5 billion.

Consolidating Magneti Marelli with Calsonic would have established an auto-parts conglomerate supplying FCA and Nissan, as well as automotive OEMs in Europe, North America, and Asia.

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