Fiat Chrysler Automobiles (FCA) has reached a tentative agreement with Calsonic Kansei to sell its subsidiary Magneti Marelli, to Calsonic Kansei after the Japanese automotive supplier raised its bid, Bloomberg reported citing as sources people familiar with the talks.
FCA and equity firm KKR & Co., which owns Calsonic, have agreed a transaction price of US$ 6.3 billion including debt, but the deal excludes certain business units of Marelli, such as the unit that makes plastic dashboards and bumpers, according to the report.
Both parts are now working on the details and an announcement could be made in the coming days, although there’s still chances that the deal could fall apart. Fiat may also keep its led lighting unit, which is related to the development of autonomous driving.
A combination of both Magneti and Calsonic would result in a business with more than US$ 17 billion in annual revenue and about 65,000 workers globally.
Magneti Marelli operates six manufacturing plants in four Mexican cities. Two facilities located in Ciudad Juarez, Chihuahua, are dedicated to the production of lighting products, while a production site in Saltillo, Coahuila, builds suspension systems.
A facility in Toluca, State of Mexico, builds both lighting products and exhaust systems. Another two plants in Tepotzotlan, State of Mexico, are each dedicated to the manufacture of lighting components and electronics such as mechatronics, instrument clusters, telematics and satellite navigation.
KKR acquired Calsonic Kansei from Nissan in 2016 for US$1.87 billion. The deal included five production sites in Mexico. Three facilities in Aguascalientes dedicated to Air-Conditioning Systems, Heat Exchange Systems, Exhaust Systems, Meters, Plastic Components, Instrument Panels and Wiring Harness Components.
The agreement also included a production unit in Durango that manufactures Heater Units, Air-Conditioning System Parts and Radiators, and a plant in Mexico City that creates Mufflers (Silencers).