FCA To Spin Off Magneti Marelli Without Raising Money, Report Says
Fiat Chrysler Automotive (FCA) has decided not to launch its ownership in Magneti Marelli as an IPO. The company, as reported by multiple sources, has decided that they will instead incorporate the company into its current shareholders and will not raise money by selling new shares. Current shareholders of FCA will be given shares of Magnet Marelli at a rate consistent with their current stake in FCA.
Magneti Marelli is an auto parts company hat has been in existence for nearly 100 years. FCA has yet to formally announce the decision but a statement is expected in the coming months and could come on June 1. The decision was made at the behest of the largest shareholder of FCA, the Agnelli family, as they were concerned with the low valuations affecting their stake by diluting it.
Magneti Marell has over 43,000 employees in nearly 20 countries and is a premier provider of electronics and lighting for automakers around the world. The company is expected to be worth upwards of $6 billion and they are being spun off from FCA in an attempt to purify FCA’s portfolio. FCA has been rumored to have been trying to sell off the company for several years now, so the move is not a surprise. There is some concern that some institutional investors may want to shed some Marelli shares as the transition takes place. FCA is also looking for spinning of its stake in companies Comau and Tesid, according to unnamed sources close to the company.