A New York-based private-equity firm is discussing a purchase of Magneti Marelli, the automotive-parts holding company that is a subsidiary of Fiat Chrysler Automobiles. FCA did not confirm the negotiations, first reported by the Wall Street Journal, but it stated that intends to “separate Magneti, subject to final approval by the board and shareholders.” That much had been announced previously, with the indication that a spin-off to shareholders was forthcoming.
KKR, the rumored buyer, is a global investment fund with multiple asset classes. Among its holdings is Calsonic Kansei Corp., an auto parts group that KKR from Nissan Motor Co. in 2017 for about $4.5 billion.
Consolidating Magneti Marelli with Calsonic would establish an auto-parts conglomerate supplying FCA and Nissan, as well as automotive OEMs in Europe, North America, and Asia.
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 could draw as much as $7 billion in the sale, according to various reports. The automaker is expected to divert revenues from the sale into its automotive brands, including Alfa Romeo, Jeep, Maserati, and Ram.