Exclusive: Fiat Chrysler exploring $3.3 billion sale of auto parts unit Magneti Marelli

Fri Jul 17, 2015 3:07pm EDT
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By Pamela Barbaglia and Agnieszka Flak

LONDON/MILAN (Reuters) - Fiat Chrysler Automobiles (FCA) (FCHA.MI: Quote) is considering whether to sell its auto parts maker Magneti Marelli after receiving interest from potential buyers, according to sources familiar with the matter.

At least two U.S. private equity funds are looking to team up with industry players and submit joint bids for Magneti Marelli, which supplies all major carmakers in Europe, the Americas and Asia, three sources told Reuters.    

A recent offer, by a group including a U.S. buyout fund and valuing the business at less than 2.5 billion euros ($2.7 billion), was rebuffed in June as FCA would not agree to sell for less than 3 billion euros, one of the sources said.

Gualberto Ranieri, a U.S.-based spokesman for FCA, said Magneti Marelli is not for sale.   

Debt-laden FCA could sell the unit either in parts or in entirety, the sources said, adding that no final decision on a disposal had been taken.

Magneti Marelli has often been touted as a takeover target. While FCA has always denied any interest in selling, the sources said the Italian-American carmaker had recently told interested parties it may reconsider its plans.    

The world's seventh-largest carmaker currently has its hands full with a planned flotation of sports car maker Ferrari, slated for after mid-October, and any decision on Magneti Marelli would be taken after that, the sources said.

Yet U.S. buyout funds have been working on the dossier for months, the sources said.   Continued...

Sergio Marchionne, Chief Executive of Fiat Chrysler, speaks during the first press preview day of the North American International Auto Show in Detroit, Michigan January 12, 2015.  REUTERS/Rebecca Cook