Fiat Chrysler Automobiles NV announced 22 Oct that it is selling its Magneti Marelli SpA auto components business to Japan’s Calsonic Kansei Corp. for €6.2bn, creating the seventh-largest independent global auto parts maker.
The new entity, to be named Magneti Marelli CK Holdings, will have a multiyear supply agreement with Fiat Chrysler, FCA said in a statement. FCA announced earlier this year it was looking to spin off its Magneti Marelli components business.
The new company will have sales of €15.2bn and maintain its operational headquarters at Magneti Marelli’s base in Milan with a combined footprint of 200 factories and research and development centers globally.
Magneti Marelli has a wide-ranging product portfolio, with plastics for lighting under its Automotive Lighting joint venture, instrument clusters, interior parts — including dashboards — and major exterior systems such as bumpers and fenders.
In 2016, the company said it produced more than 21 million headlamps, 29 million rear lighting units and 4.7 million instrument clusters. According to Automotive News, a sister publication of Plastics News, Magneti Marelli was the 28th largest auto components supplier globally in 2016, with $8.2 billion in sales.
In North America, Calsonic Kansei currently has two injection molding plants, with estimated sales of $130 million, according to Plastics News data. Globally, is reported Yen998.6bn (€7.6bn) in sales in its 2017 fiscal year.
Calsonic Kansei CEO Beda Bolzenius, who will lead the new company, said the two companies have complementary geographic footprints. Calsonic Kansei is based in Saitama, Japan.
“Our industry has gone through fierce change in recent years and the phase to come will be even more dynamic,” Bolzenius said. “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.”
Magneti Marelli CEO Ermanno Ferrari will join the board of the new company. The deal is expected to close in fall 2019.
Fiat Chrysler CEO Mike Manley the new entity “will be among FCA’s most important business partners and we would like to see that relationship grow even further in the future.”