Fiat Chrysler To Sell Magneti Marelli To Calsonic Kansei For €6.2 Bln; Stock Up

(RTTNews) - Shares of Fiat Chrysler Automobiles N.V. (FCAU) were gaining around 5 percent in the morning trading in Italy after the automaker announced Monday that it has entered into a definitive agreement to sell its automotive components business Magneti Marelli S.p.A for 6.2 billion euros.

The buyer is CK Holdings Co., Ltd., a holding company of Japanese automotive component supplier Calsonic Kansei Corp.

Milan -based Magneti Marelli is an automotive components manufacturer, specializing in lighting, powertrains, electronics, exhausts, suspensions, shock absorbers, and motorsports. Total revenues for 2017 were 8.2 billion euros.

Following the closing of the deal, CK Holdings will be renamed as Magneti Marelli CK Holdings. The legal entity name is subject to shareholder approval.

The combined businesses of Calsonic Kansei and Magneti Marelli will create the world's 7th largest automotive components supplier based on total revenues of 15.2 billion euros.

The new entity will operate out of nearly 200 facilities and R&D centers across Europe, Japan, the Americas, and Asia Pacific.

The transaction is expected to close in the first half of 2019 and is subject to regulatory approvals and other customary closing conditions.

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. It will sustain Magneti Marelli's Italian business operations.

The combined company will be led by Beda Bolzenius, currently CEO of Calsonic Kansei, based in Japan. Ermanno Ferrari, CEO of Magneti Marelli, will join the Magneti Marelli CK Holdings board.

Fiat Chrysler shares were trading at 14.12 euros, up 5.01 percent.