Team-BHP - FCA could spin-off Magneti Marelli

Fiat Chrysler Automobiles (FCA) boss Sergio Marchionne has said that a spin-off is the preferred option for its subsidiary Magneti Marelli. According to a media report, FCA is looking towards rearranging its various businesses and the component maker would be separated from the company’s portfolio.

Back in 2015, FCA considered selling off Magneti Marelli, but the plans did not materialise as the company was working on the Ferrari separation at that time. In 2016, it was rumoured that Samsung might buy Magneti Marelli, but the company went ahead to purchase Harman instead.

FCA spun off Ferrari last year by selling its 80% stake in the Italian sportscar manufacturer to its shareholders. FCA reportedly got over $4 billion from the Ferrari spin-off and would be thinking of using the same strategy for Magneti Marelli as well. This move could be a way for the Italian automaker to achieve the self-set target to become cash-positive by the end of 2018. Sergio Marchionne stated that FCA will be going ahead with the separation with Magneti Marelli in 2018, and it will be detailed in next year's business plan.

Magneti Marelli has a presence in over 19 countries and employs over 38,000 people. The company makes parts for automotive lighting, engines, electronics, suspensions, exhausts and more. It also provides electronic components for vehicles in competitive motorsports like Formula One, MotoGP and World Rally Championship. In India, they have factories in Pune, Chennai, Manesar, Faridabad and New Delhi.

Source - Reuters

Link to Team-BHP News

Selling your prized assets is hardly the preferred way to get cash positive & reduce debt, but Fiat-Chrysler is in trouble financially. Cleaning up its balance sheet could also make the company more attractive for a merger / takeover, something Sergio has been desperate for. I think this is the key reason for the spinoffs.

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Originally Posted by GTO (Post 4280567)

+1

It is really sad to see the jewels in Fiat empire being sold one by one for the group to survive after all of Sergio' attempts to merge with someone else falling through.

Back in the days, the Magneti Marelli logo used to sit proudly on the F1 cars from Maranello. And they are also well placed for the future. Cars are getting more electronic than mechanical as days pass.

And I really wonder whether some other brand/ group will show the courage to merge with FCA with Chrysler on board. Apart from Jeep, no other brand in Chrysler' portfolio has a global pull.

Fiat shouldn't have merged with Chrysler. Don't forget the fact that Daimler even paid Cerberus Capital $650 million to take Chrysler and associated liabilities off its hand. That's how badly the Germans wanted the group off its chest. And Fiat walked into the mess and is paying the price for the last 8 years or so.

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Originally Posted by deetjohn (Post 4281233)

It is really sad to see the jewels in Fiat empire being sold one by one for the group to survive after all of Sergio' attempts to merge with someone else falling through.

Call me old-fashioned, but wouldn't a company be more attractive for a merger / takeover with all the jewels? Magneti Marelli is profitable, and so was Ferrari. Guess Sergio really needs CASH.

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Apart from Jeep, no other brand in Chrysler' portfolio has a global pull.

People say that the value of 'Jeep' is more than its parent company's!

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Fiat shouldn't have merged with Chrysler.

Fiat really bit off more than it could chew. Just like Jürgen Schrempp who thought merging & buying was the only way forward - Mercedes undid all his mistakes later (and painfully, at that). Well, at least Sergio got Jeep.

Its not just magneti marelli. There are rumours going around that alfaromeo/maserati would be sold off too. And Jaguar is being touted as a potential buyer for either of these two. Dont know whether there is much truth to this. If it were I would say that's a good thing. Alfa and especially Maserati has been languishing under Fiat for so long. The current ghibli, quattroporte, levante line up looks dull as ditch water and the granturismo is limping on its last legs.

FCA to review potential Magneti Marelli spinoff in Q2.

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Last month FCA CEO said he had recommended to the company's board that the automaker spin off the maker of components for lighting, engines, electronics, suspension and exhausts, to shareholders by the end of 2018.

Magneti Marelli, based in Milan, with worldwide sales to automakers of $8.23 billion in its 2016 fiscal year.

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FCA Announces Plans to Separate Magneti Marelli.

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The Board of Directors of Fiat Chrysler Automobiles N.V. ("FCA") announced today that it has authorized FCA management to develop and implement a plan to separate the Magneti Marelli business from FCA and to distribute shares of a new holding company for Magneti Marelli to the shareholders of FCA. The separation is expected to be completed by the end of 2018 or early 2019 and shares of Magneti Marelli are expected to be listed on the Milan stock exchange.

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Fiat Chrysler prepares for Magneti Marelli spinoff.

Fiat Chrysler Automobiles has kicked off its planned spinoff of parts maker Magneti Marelli which will be registered in the Netherlands and listed on the Milan stock exchange.

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FCA has created a separate entity called MM Srl, the document showed, into which it will fold Magneti Marelli's electronics and electro-mechanical operations related to racing motorbikes and racing cars, as well as 14 other holdings in various companies around the world, including Germany, Slovakia, Mexico and South Africa.

MM will be incorporated into a Dutch holding company via a cross-border merger

Analysts say Magneti Marelli could be worth between $4.2 billion and $5.8 billion. It sits within FCA's components unit alongside robotics specialist Comau and castings firm Teksid.

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Fiat to Sell High- Tech Car-Parts Arm Magneti Marelli to KKR's Calsonic.

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The transaction value could be as much as 6.2 billion euros ($7.1 billion), two of the people said, and would end months of negotiations over terms.
A merger of Magneti Marelli and Calsonic Kansei would create a supplier with more than $17 billion in annual revenue and about 65,000 workers from Tokyo to Milan

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CK HOLDINGS BUYS MAGNETI MARELLI FROM FCA FOR 5.8 BILLION EUROS

K Holdings, the holding company of Calsonic Kansei Corporation announced the complete acquisition of Magneti Marelli. The Japan-based firm, CK Holdings bought Magneti Marelli from FCA (Fiat Chrysler Automobiles) for 5.8 billion Euros - that translates to Rs 4,48,61,99,50,920 by today's currency exchange rates. Combined together, Magneti Marelli CK Holdings Co., Ltd. both the companies will generate a revenue of 14.6 billion Euros (Rs 11,29,10,07,33,090). The companies together are the seventh largest global independent automotive supplier based on revenue.

http://overdrive.in/news-cars-auto/c...billion-euros/