Fiat Chrysler confirmed plans to spin off parts maker Magneti Marelli following media reports investment firm KKR was in talks to acquire the unit.
“FCA is pursuing a plan to separate the Magneti Marelli business … it will evaluate bona fide proposals for alternative transactions that may be in the best interest of the company,” a spokesman told Reuters in an emailed statement.
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The company would not comment on market rumours, the statement added.
The US buyout firm was in talks to acquire the global vehicle parts business, Private Equity News reported earlier, citing unnamed sources.
The report said the potential sale price wasn’t known but some analysts valued Magneti at around EUR3.23bn.
The report added former CEO Sergio Marchionne, who died recently, was focused on spinning off Magenti to the automaker’s shareholders and listing the stock by the end of this year or early next year on the Milan stock exchange.
An outright sale suggested his successor, Mike Manley, expected to generate more value than it would from a spin-off while freeing him to focus more of his attention on FCA’s core Jeep, Ram and other car brands, penews.com said.
The report said KKR was expected to acquire Magneti through Japan’s Calsonic Kansei, creating a giant supplier which could cut costs by eliminating overlapping operations. KKR bought Calsonic last year from Nissan and other shareholders for about US$4.5bn.
