Fiat Chrysler Automobiles (FCA) has approved the sale of its car parts corporation Magneti Marelli to Japanese firm CK Holdings. The latter is part of the Calsonic Kansei Corporation and has purchased the parts company for an amount of $6.5 billion, lower than the initial price tag due to the unit's changed financial position. FCA had agreed to sell Magneti Marelli last year to CK Holdings for $6.9 billion but the sale price had to be adjusted based on Magneti's estimated financial position as of the closing date. The combined business will operate under the entity "Magneti Marelli CK Holdings Co. Ltd." Ermanno Ferrari, CEO of Magneti Marelli, will join the Magneti Marelli CK Holdings board.
Beda Bolzenius, CEO, Calsonic Kansei and Magneti Marelli said, "We are delighted that today we formally come together as one company. In the last few months, our two companies have spent a lot of time getting to know each other and our respective businesses and I'm very confident and excited about our future potential as one firm. As part of this, our relationship with FCA remains an important one, as we continue to serve them as part of our multi-year supply agreement. In being able to serve our customers as one firm, integration is a key priority - both culturally and operationally. We will coordinate our efforts to focus on creating a globally-diversified tier-one supplier, which our customers and employees can be proud to be part of."
This transaction has received all the necessary regulatory and anti-trust approvals, according to the company, and combines the two businesses for a cumulative revenue of $16.32 billion. With the acquisition, Magneti Marelli CK Holdings becomes the world's seventh largest global automotive supplier, based on total revenues. The company will operate out of 170 facilities, and R&D centres spread across Europe, Japan, the Americas and the Asia Pacific.