Fiat Chrysler Automobiles NV ("FCA") (NYSE: FCAU / MTA: FCAU / MTA: FCA) announces that it has entered into a definitive agreement (the "Transaction") for the sale of the Magneti Marelli SpA automotive components business (" Magneti Marelli ”) to CK Holdings Co. Ltd.“ (“CK Holdings”), holding company of Calsonic Kansei Corporation (“Calsonic Kansei”), one of the main Japanese suppliers of automotive components. Upon completion of the transaction, CK Holdings will be renamed as Magneti Marelli CK Holdings (the legal entity name is subject to shareholder approval). The joint activities of Calsonic Kansei and Magneti Marelli will represent the 7th largest independent group in the world by turnover in automotive components.
The value of the transaction is equal to 6,2 billion euros. The transaction is expected to close in the first half of 2019 and is subject to regulatory approvals and other customary closing conditions. The Transaction represents a unique opportunity to combine two successful businesses to create one of the world's leading independent suppliers of automotive components, with a total turnover of 15,2 billion euros (1.975 billion yen - Exchange rate: EUR 1 / JPY 130). The integration is a decisive step towards both companies' strategic ambition to become a premier, globally diversified supplier.
The combined company will be better positioned to serve its customers around the world due to its larger size, financial strength and highly complementary nature of their product lines and geographic presence. The new entity will operate nearly 200 R&D plants and centers in Europe, Japan, America and Asia-Pacific.
FCA has also signed a multi-year supply contract that will further strengthen a mutually beneficial relationship both for the growing range of products offered by Magneti Marelli and FCA and which will support the operations of Magneti Marelli in Italy, well positioning them for continued growth and success in the future.
The combined company will be led by Beda Bolzenius, current CEO of Calsonic Kansei, based in Japan.
Ermanno Ferrari, CEO of Magneti Marelli, will join the board of Magneti Marelli CK Holdings.
Commenting on the deal, FCA CEO Mike Manley said: “After carefully examining a number of options to allow Magneti Marelli to express its full potential in the next phase of its development, the combination with Calsonic Kansei, we have revealed an ideal opportunity to accelerate the future growth of Magneti Marelli for the benefit of its customers and its exceptional people. The combined businesses will continue to be one of FCA's most important business partners and we would like to see this relationship grow further in the future. The Transaction also recognizes the full strategic value of Magneti Marelli and is another important step in our continuous focus on creating value ”.
Beda Bolzenius, CEO of Calsonic Kansei, said: “In recent years our industry has gone through a period of major change and the next phase will be even more dynamic. It is exciting to create a solid platform for Calsonic Kansei and Magneti Marelli on which to work together and create a competitive automotive supplier that is extremely well placed to enter the global Top Ten. Together we will benefit from a geographic presence and complementary product lines, while our respective customers will benefit from greater investment in people, processes and new innovative products ”.
Ermanno Ferrari, CEO of Magneti Marelli said: “This is a day of transformation for both Magneti Marelli and Calsonic Kansei, thus creating a global business with an exceptional range, geographical presence, competence and future prospects. This is a moment of great opportunity for all of our collaborators, who are part of a secure, growing and independent company of considerable size that can look to the future with energy, ambition and trust ”.