International private equity firms are circling Italy’s auto maker FCA to buy its auto parts maker subsidiary Magneti Marelli. FCA is now led by ceo Mike Manley, after previous powerful ceo Sergio Marchionne passed away last July. Mr. Marchionne decided last April that Magneti Marelli should have been spinned-out from the FCA group and listed on the Italian Stock Exchange by the end of 2018 and the beginning of 2019 (see here the press release).
The Wall Street Journal wrote last Aug 22 around midday that US private equity giant Kkr is in talks with FCA about acquiring Magneti Marelli in a deal that might value the company between 3.23 and 6 billion euros, with a more reasonable range of 4-5 billion euros. Just a few hours later Bloomberg wrote that Kkr might acquire Magneti Marelli through its Janapese portfolio company Calsonic Kansei Corp, which was bought last year from Nissan Motor Co and other shareholders for a 4.5 billion dollars value. The two companies, which are similar in size, might then be merged and give brith to a world leader in thea auto parts sector with about 18 billion euros in revenues. The same day FCA refused to comment on rumors but pointed out that FCA is still on track with the spin-out project for Magneti Marelli while it might evaluate other options.
As for Bloomberg however Kkr is not alone in working on the deal. Rumors are that also an Asian auto parts supplier is interested in buying the Italian company and that US private equity firms Apollo Global Management and Bain Capital are on the deal too.
Magneti Marelli counts more than 43,000 employees, 86 production plants and 14 R&D centers (including joint ventures). The company ha s a presence in 19 countries and is supplier of all major auto makers in the world. A 38% f Magneti Marelli’s revenues in 2017 came from sales to FCA group. While 2017 financial statements are still not available, Magneti Marelli closed FY 2016 with 7.9 billion euros in revenues.