It’s official, Fiat Chrysler Automobiles sells Magneti Marelli. FCA will continue to use components from the Italian auto parts maker. For the first time in ten years, the influx of cash flow allowed FCA to offer a special cash distribution to its shareholders. That’s a nice surprise for investors, who will receive this dividend pay out on May 30.
Mike Manley, FCA CEO, said in a statement, “FCA remains committed to Magneti Marelli, with the new company continuing as a key supplier. This sale also recognizes the full strategic value of Magneti Marelli, improving our financial position, delivering value to our shareholders and allowing us to enhance our focus on our core product portfolio.” They completed the sale of components maker Magneti Marelli to CK Holdings., Ltd., the holding company of Calsonic Kansei Corporation. The Japanese parts supplier paid $6.5 billion, which is less than the original $7.1 billion deal announced in October of 2018. Pricing was adjusted based on Magneti Marelli’s financial position six months after the original deal.
The company will be renamed Magneti Marelli CK Holdings. The two businesses combined will become the world’s seventh largest independent automotive component supplier based on total revenues. Operation will be facilitated at nearly 200 locations and R&D centers across Europe, Japan, the Americas, and Asia Pacifica.
The parts supplier will continue to deliver components for future models of the FCA. Ermano Ferrari, Magneti Marelli CEO said, “This is transformational day for both Magneti Marelli and Calsonic Kansei, creating as it does a global business of exceptional range, reach, and expertise, and future prospects.” The spinoff and sale of Magneti Marelli was long planned by late CEO Sergio Marchionne as a strategic plan to unlock shareholder value.