Magneti Marelli S.p.A., the high-end maker of automotive parts and components, will be soon own by a Japanese company. This comes as it current owner, Fiat Chrysler Automobiles has inked an agreement to sell Magneti Marelli to CK Holdings Co., Ltd. – holding company of Calsonic Kansei Corp. -- for around EUR6.2 billion. The companies expect to close the transaction in the first half of 2019, as subject to regulatory approvals as well as customary closing conditions.
The acquisition of Magneti Marelli by CK Holdings will lead to the Italian company’s combination with Calsonic Kansei, which is also a manufacturer of automotive components that does its business in Japan. Once combined, the merged Magneti Marelli and Calsonic Kansei will be operating under a new name -- Magneti Marelli CK Holdings. Nonetheless, this new legal entity name remains subject to approval of shareholders. The combination of the operations and business of Magneti Marelli and Calsonic Kansei will make the Magneti Marelli CK Holdings the seventh largest independent automotive components supplier in the world, as based on total revenues. Magneti Marelli and Calsonic Kansei have combined revenues of EUR 15.2 billion (JPY1,975 billion).
Posting consolidated revenues of EUR7.7 billion (JPY 998 billion1) in the fiscal year ended March 2018, Calsonic Kansei is involved in the production of thermal products, exhaust systems, electronics and automotive interiors. Based in Saitama, Japan, Calsonic Kansei is a wholly owned portfolio company of KKR has recently celebrated its 80th year in existence.
On the other hand, Magneti Marelli specializes in powertrain systems as well as intelligent systems for active and passive vehicle safety. It is also involved in automotive lighting systems, powertrain control systems, electronic instrument clusters, body control systems, and telematics systems. Magneti Marelli also develops suspension systems and components, as well as exhaust systems. Based in Corbetta, Italy, Magneti Marelli operates 86 manufacturing site, 12 R&D centers and 26 application centers in 19 countries around the around. It has been a subsidiary of FCA since 1967.
According to the companies, the combination of these two successful businesses represents a decisive step towards their strategic ambition to become a leading globally diversified tier-one automotive supplier.
Once it commences operations as a combined company, Magneti Marelli CK Holdings will be able to take advantage of its enhanced scale, financial strength as well as geographic footprint to be in better position serve its customers around the world. As combined, Magneti Marelli CK Holdings will have around 200 facilities as well as R&D centers not just in Europe and Japan, but also in the Americas and Asia Pacific.
When Magneti Marelli CK Holdings becomes legal and official as a new company, it will be based in Japan and will be headed by the current chief executive of Calsonic Kansei, Beda Bolzenius. The current CEO of of Magneti Marelli, Ermanno Ferrari, will become a member of the board of the Magneti Marelli CK Holdings.