Breaking Up Isn't Hard to Do: Fiat Chrysler Announces Parts Division Spin-off

Steph Willems
by Steph Willems

As Magneti Marelli prepares for its 100th birthday next year, the Italian parts supplier can expect to mark the occasion while newly single.

In a bid to streamline its operations, Fiat Chrysler Automobiles has announced it is moving forward with a plan to spin off the weighty subsidiary. The split should be complete by the end of this year or early next.

Magneti Marelli manufactures numerous automotive components, from lighting to powertrain parts to electronics, and employs roughly 43,000 workers in 19 countries. Dozens of manufacturing plants exist under its umbrella. Started as a joint venture between Fiat and Ercole Marelli in 1919, the company officially became a Fiat subsidiary in 1967.

According to Reuters, analysts estimate the division’s net worth at between 4.4 and 6.1 billion dollars.

Early Thursday, FCA issued a statement saying its board of directors had “authorized FCA management to develop and implement a plan to separate the Magneti Marelli business from FCA and to distribute shares of a new holding company for Magneti Marelli to the shareholders of FCA.” The company’s shares will be listen on the Milan stock exchange.

FCA CEO Sergio Marchionne stated that spinning off the division will “deliver value” to FCA shareholders and put Magneti Marelli in a position for growth. “The spin-off will also allow FCA to further focus on its core portfolio while at the same time improving its capital position,” he said.

The parts business was just one of the pieces of the FCA pie rumored to separate from the flock last year. Alfa Romeo and Maserati were included in this list, but Marchionne squashed murmurs of the brands’ impending spin-off. The same rumors circulated around Jeep after reports emerged Chinese automakers expressing interest in acquiring the brand. Jeep, Marchionne said, is not for sale.

FCA remains on a fairly aggressive debt-cutting spree, with the automaker hoping to finish the year in the black.

[Image: Fiat Chrysler Automobiles]

Steph Willems
Steph Willems

More by Steph Willems

Comments
Join the conversation
2 of 4 comments
  • Ect Ect on Apr 05, 2018

    "automaker hoping to finish the year in the black." Huh? FCA has been and is in the black. 2017 net profit, for example, was €5 billion.

  • Ohioeric Ohioeric on Apr 07, 2018

    Didn't work out so well for Delphi from GM or Visteon from Ford. Third time is a charm? I doubt it.

  • CoastieLenn No idea why, but nothing about a 4Runner excites me post-2004. To me, they're peak "try-hard", even above the Wrangler and Gladiator.
  • AZFelix A well earned anniversary.Can they also attend to the Mach-E?
  • Jalop1991 The intermediate shaft and right front driveshaft may not be fully engaged due to suspected improper assembly by the supplier. Over time, partial engagement can cause damage to the intermediate shaft splines. Damaged shaft splines may result in unintended vehicle movement while in Park if the parking brake is not engagedGee, my Chrysler van automatically engages the parking brake when we put it in Park. Do you mean to tell me that the idjits at Kia, and the idjit buyers, couldn't figure out wanting this in THEIR MOST EXPENSIVE VEHICLE????
  • Dukeisduke I've been waiting to see if they were going to do something special for the 60th Anniversary. I was four years old when the Mustang was introduced. I can remember that one of our neighbors bought a '65 coupe (they were all titled as '65 models, even the '64-1/2 cars), and it's the first one I can remember seeing. In the '90s I knew an older gentleman that owned a '64-1/2 model coupe with the 260 V8.
  • SCE to AUX "...the complete Mustang model lineup to peruse"Will the fake Mustang show up, too?
Next