Fiat Chrysler Automobiles has just announced that it is selling automotive components arm Magneti Marelli to another leading automotive component supplier, Calsonic Kansei. The merger will make the new company the seventh largest supplier of automotive components by revenues.
The transaction has a value of EUR 6.2 billion. That's about CAD $9.3 billion. The two companies showed sales of around $25.3 billion last year.
Magneti Marelli was Fiat's in-house parts brand for many automotive components. Lighting systems, body control components, and other electronics. They also developed some suspension components and exhaust systems. It was founded as a joint-venture with Fiat and Ercole Marelli in 1919. The company's first product was magnetos for automotive and aviation applications.
Calsonic Kansei was formed in 1999 as a merger between air conditioner manufacturer Calsonic and gauge manufacturer Kansei. Nissan held a large share in the company until 2016. Calsonic Kansei also fabricates electronic and exhaust components for automotive use as well as air conditioning and ventilation systems. Both companies supply components to numerous automakers.
FCA says that part of the deal is a multi-year agreement that will see Magneti Marelli continue to supply components to the automaker. FCA said that this will sustain the supplier's Italian operations, maintaining the company's presence in that country.
The new company will have nearly 200 manufacturing and research and development facilities worldwide. The company will be lead by current Calsonic Kansei CEO Beda Bolzenius with Magneti Marelli CEO Ermanno Ferrari joining the new board.
