KKR's Calsonic buys Fiat Chrysler parts firm Magneti Marelli for $7.1 billion

Magneti Marelli’s sale to KKR’s Calsonic Kansei creates an auto-parts maker with more than $17 billion in annual revenue and about 65,000 workers from Tokyo to Milan

Fiat Chrysler's (FCA) bottom line is now a little fatter.

Fiat-Chrysler Automobiles officially has a buyer for its Magneti Marelli supplier division in Japan's Calsonic Kansei, itself owned by USA -based private equity firm KKR.

One of the biggest tasks left to Mike Manley when he took over from Sergio Marchionne as chief executive of Fiat Chrysler Automobiles was the pending spin-off of Magneti Marelli. The combined businesses of Calsonic Kansei and Magneti Marelli will create the world's 7th largest global independent automotive components supplier based on total revenues.

FCA shares were up 3.6 percent at 1358 GMT as investors welcomed the hefty price tag, which will boost FCA's net cash position, raise expectations of a share buyback and pave the way for dividend payments the carmaker promised under its new five-year strategy plan unveiled in June. Calsonic initially made a bid of $6.7 billion, according to the report.

Marchionne had set in motion a process to spin off the unit and distribute its shares to FCA shareholders by early 2019, but said in June that FCA would still be "receptive" to an offer.

The Transaction represents a unique opportunity to combine two successful businesses to create one of the leading global independent automotive components suppliers, with combined revenues of Euro 15.2 billion (JPY 1,975 billion).

Magneti Marelli, founded in 1919, employs some 43,000 people and operates in 21 countries.

Calsonic is paying around 17 times next year's estimated earnings for Magneti Marelli, according to Galliers' calculations. The agreement represents a transaction value of Euro 6.2 billion.

FCA has also agreed to a multi-year Supply Agreement that will further strengthen a mutually beneficial relationship for both Magneti Marelli and FCA's expanding model range and which will sustain Magneti Marelli's Italian business operations, positioning it strongly for continued growth and success in the future.

Specialized in lighting, powertrain, and electronics, Magneti Marelli is responsible for Fiat Chrysler shares shooting up on the stock exchange.

The transaction is expected to be completed in the first half of 2019, and the new combined company will be led by Beda Bolzenius, who is now the CEO of Calsonic Kansei.

Related News:

  • Virat Kohli's latest century extends incredible record

    Virat Kohli's latest century extends incredible record

    The young man was rested in the first ODI and this had a bearing on the middle overs where India were not able to pick up wickets. Ganguly has hit 189 sixes while Rohit now has slammed 194 maximums which puts him third in the list amongst Indians.
    Louis C.K. masturbated in front of Sarah Silverman with her consent

    Louis C.K. masturbated in front of Sarah Silverman with her consent

    However, she also says she's fine with her friend making a comeback, so long as he *ahem* comes clean about the scandal on stage. His fame became widespread, and the influence, power, and status he wielded as a result were hard for him to adjust to.
    Americans, local guide killed in Costa Rica river rafting accident

    Americans, local guide killed in Costa Rica river rafting accident

    Everyone struggled to stay above the water and dealt with heavy blows from rocks that were in or around the water. A search and rescue operation involving 120 people was launched for the group, reported Q Costa Rica .
  • Thousands rally in Taiwan, call for referendum on independence from China

    Thousands rally in Taiwan, call for referendum on independence from China

    Formosa Alliance is urging the DPP government, which has a majority in parliament, to change the laws to allow such a vote. Tsai had to be aware of the interests of the Taiwanese people and the possibility of a cross-strait conflict, he said.
    Roman Reigns Announces Leukemia Diagnosis, Vacates WWE Universal Title

    Roman Reigns Announces Leukemia Diagnosis, Vacates WWE Universal Title

    Reigns ended the segment by saying that this was not a retirement speech and he plans on returning once he has beaten the disease. But you know who gave me a chance? He paid gratitude to WWE for taking a chance on him and allowing his dreams to come true.
    Here's how you can watch President Trump's rally in Houston

    Here's how you can watch President Trump's rally in Houston

    Trump infamously insulted the looks of Cruz's wife Heidi, vaguely suggested Cruz's father had played a role in John F. Vice President Mike Pence and Donald Trump , Jr., have already traveled to Texas to support Cruz.
  • David Beckham admits marriage 'hard work'

    David Beckham admits marriage 'hard work'

    The British icon - who has been married to the former pop star since 1999 - confessed: " Victoria rips me about it all the time". An insider claimed it was like "a nuclear bomb had gone off" after the reports surfaced, questioning their marriage once again.
    Devil May Cry 5 Collector's Edition Includes Very Expensive Collectible

    Devil May Cry 5 Collector's Edition Includes Very Expensive Collectible

    The reservation period runs from today to Monday, November 19, so it'll be open for just about a month. If you're a bit tight on cash, then the 600,000 yen/ £4,000 edition is going to be up your alley.
    Customer orders two waters and leaves $10,000 tip

    Customer orders two waters and leaves $10,000 tip

    The note attached, the restaurant owner told the News and Observer , said: "Good people are still doing good things these days". A North Carolina waitress who served a customer who only asked for two glasses of water has found herself flush with cash.
  • Europe, Japan ready spacecraft for 7-year journey to Mercury

    Europe, Japan ready spacecraft for 7-year journey to Mercury

    It was also determined that it rotates as it orbits the sun, in fact, rotating once on its axis every two orbits around the sun. A complex series of fly-bys past the Earth, Venus, and Mercury will also help to reduce BepiColombo's velocity by 7km/s.

    Sri Lanka's Rangana Herath to retire after England Test series opener

    Herath will now draw the curtains on a 19-year-long global career after claiming 522 wickets across all formats of the game.
    Katie Taylor: Amanda Serrano Doing Everything To Avoid Me

    Katie Taylor: Amanda Serrano Doing Everything To Avoid Me

    It was ridiculous of him", suggested Taylor, who still wants to fight Cindy's younger sister, Amanda, who was ringside. She even stopped, taunting her opponent to come forward and actually fight back.

Most liked

OnePlus to launch a 5G smartphone in 2019
According to Pei, OnePlus' teams kickstarted plans to support 5G back in 2016, and were joined by Qualcomm the following year. It will rely on the Snapdragon X50 modem with the downsized QTM052 mmWave antenna module, announced at the conference.

Samsung updates display for its Windows Mixed Reality headset, introduces HMD Odyssey+
Interested buyers can now buy the Windows Mixed Reality headset in the United States via Microsoft store and Samsung.com. That's double the pixel count of the original Odyssey's 615 PPI.

Patrick Peterson requests trade from Cardinals, report says
Just last week, I wrote about why the Giants should entertain a trade for Peterson . The Cardinals, meanwhile, are insisting they will not trade the All Pro cornerback.

Suspected explosive device found at George Soros's New York home
An employee at the Katonah home opened a package that had been placed in the mailbox and found the device, Bedford Police said. Jeff Flake over his decision to vote for Brett Kavanaugh's nomination to the Supreme Court were actors paid by Soros.

Lynch out at least 1 month with groin injury
His injury is not only going to hurt the team's production on the field, but they will miss his leadership as well. Rapoport went on to note that injured reserve could be a distinct possibility for the 32-year-old running back.

Brooklyn residents make strides against breast cancer in Coney Island
Women must be residents of SC and have household incomes at or below 250 percent of the Federal Poverty Limit. If a breast cancer cell doesn't have receptors any of these, the cancer is called triple negative.

Donald Trump: US will build up nuclear arsenal
Asked if that were a threat to Russian President Vladimir Putin, Trump said: "It's a threat to whoever you want". The 1987 pact helps protect the security of the United States and its allies in Europe and the Far East.

The Cowboys Massively Overpaid for Amari Cooper
The Cowboys are going into their bye week, and the Raiders are returning from their break to face Indianapolis at home Sunday. In 2000, Jones sent two first-round picks to Seattle for Joey Galloway before the first of three straight 5-11 seasons.

Iconic Halloween themed weapon is returning soon to Fortnite
Developers will be using the extra time to further improve the UI, game menus, adding polish, an updated Hero System and more. The exact start date for Fortnitemares hasn't been revealed by Epic Games , but it is likely to begin later this week.

Windows has another new October update issue to fix
The previous version 1809 bug resulted in data loss for what Microsoft says is 1 in every 10,000 users. Now, people have come across another Windows 1809 bug which appears to be another File Explorer issue.

Samsung HMD Odyssey Plus improves on comfort, screens
Availability will expand to Korea, China, Hong Kong, and Brazil, among other countries, at some point in the future. Samsung is starting the work week by announcing something of a refresh for its HMD Odyssey headset.

Dead Sea Scroll Fragments in Museum of the Bible Are Fake
But around 2002, a wave of new fragments began mysteriously appearing on the market, despite skepticism from Biblical scholars. Between 2009 and 2014, Steve Green, the owner of Hobby Lobby, purchased up to 16 fragments in the name of the company.

Eric Reid Calls Eagles’ Malcolm Jenkins A "Sellout" After Pre-Game Clash
Reid signed with the Panthers last month after starting free safety Da'Norris Searcy was placed on injured reserve. It reportedly goes back to their feud that began previous year , when Reid withdrew from the Players Coalition.

Search on for 2nd suspect in fatal Georgia police shooting
Police are still searching Monday for 18-year-old Tafahree Maynard, who's accused of killing Toney. Antwan Toney is pictured in this undated photo released by Gwinnett County Police in Georgia.

Two Koreas, UN Command agree to withdraw firearms, guard posts by Thursday
Vincent Brooks as commander of the UNC, noted the efforts to demilitarize the border region are subject to UNC approval. It's well-known for the blue conference buildings that straddle the border, a popular tourist destination.