Fiat Chrysler Automobiles N.V. (FCA) announces that it has entered into a definitive agreement to sell its automotive components business Magneti Marelli S.p.A. to CK Holdings Co., Ltd.
CK is a holding company of Calsonic Kansei Corporation a Japanese automotive component supplier. Following the closing of the transaction, CK Holdings will be renamed as Magneti Marelli CK Holdings. The combined businesses of Calsonic Kansei and Magneti Marelli will create the world’s 7th largest global independent automotive components supplier based on total revenues.
The agreement represents a transaction value of EUR 6.2 billion ($9.3 billion CAD). The Transaction is expected to close in the first half of 2019 and is subject to regulatory approvals and other customary closing conditions.
Commenting on the transaction, Mike Manley, CEO of FCA, said: “Having carefully examined a range of options to enable Magneti Marelli to express its full potential in the next phase of its development, this combination with Calsonic Kansei has emerged as an ideal opportunity to accelerate Magneti Marelli’s future growth for the benefit of its customers and its outstanding people. The combined business will continue to be among FCA’s most important business partners and we would like to see that relationship grow even further in the future. The transaction also recognizes the full strategic value of Magneti Marelli and is another important step in our relentless focus on value creation.”
The transaction combines two businesses to create one of the largest global independent automotive components suppliers, with combined revenues of EUR 15.2 billion. The new entity will operate out of nearly 200 facilities and R&D centers across Europe, Japan, the Americas, and Asia Pacific.
FCA has also agreed to a multi-year supply agreement that will further strengthen a mutually beneficial relationship for both Magneti Marelli and FCA’s expanding model range and which will sustain Magneti Marelli’s Italian business operations, positioning it strongly for continued growth and success in the future.
The combined company will be led by Beda Bolzenius, currently CEO of Calsonic Kansei, based in Japan. Ermanno Ferrari, CEO of Magneti Marelli, will join the Magneti Marelli CK Holdings* board.
Beda Bolzenius, CEO of Calsonic Kansei, said: “Our industry has gone through fierce change in recent years and the phase to come will be even more dynamic. It is exciting to form a strong platform for Calsonic Kansei and Magneti Marelli to work together and create a competitive automotive supplier which is extremely well placed among the global Top Ten. Together, we will benefit from complementary geographic footprints and product lines, while our respective customers will benefit from an increased investment in people, processes and innovative new products.”
Ermanno Ferrari, CEO of Magneti Marelli, said: “This is a transformational day for both Magneti Marelli and Calsonic Kansei, creating as it does a global business of exceptional range, reach, expertise and future prospects. This is a moment of great opportunity for all our people to be part of a secure, growing and independent company of considerable scale that can look to the future with energy, ambition and confidence.”