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