FCA begins Magneti Marelli separation

Last year Fiat Chrysler Automobiles (FCA) boss Sergio Marchionne revealed that a spin-off is the preferred future for component maker Magneti Marelli. According to a media report, the separation has now been initiated and the brand could now be registered in the Netherlands and listed on the Milan stock exchange. This process is expected to be completed by late 2018 or early 2019.

Back in 2016, in a similar strategy, FCA separated from Ferrari by selling its stake to shareholders. FCA secured around US $4 billion for the separation. Magneti Marelli would be spun-off in the same way, as a part of a plan by Marchionne.

Reports indicate that FCA has made a new company - MM Srl, which would consist of Magneti Marelli’s electronics and electro-mechanical operations related to racing motorbikes & cars and 14 other holdings in different companies across the globe including those in Germany, Slovakia, Mexico and South Africa. A loyalty share scheme to reward long-term investors is expected to be introduced.

Samsung considered buying Magneti Marelli back in 2016, but the company purchased Harman instead. Magneti Marelli employs around 43,000 people across 19 countries and makes parts for automotive lighting, powertrains, electronics and more. In India, they are present in Pune, Chennai and Gurgaon.

Source: Reuters