Automobile major Fiat Chrysler Automobiles (FCA) is on the verge of taking a final call on whether to divest its auto parts wing Magneti Marelli in the face of potential buyers expressing interest.
Two private equity funds based out of the US seek to partner with industry players and issue joint bids for Magneti Marelli, sources familiar with the development told Reuters.
Eyeing full control over Magneti Marelli, the bidding parties would divide the arms of the auto parts maker in accordance with specialization.
A number of large buyout funds, mainly U.S.-based, are particularly interested in Magneti Marelli's lighting unit, which could be carved out and turned into a standalone firm, the source said.
Though a spokesperson for FCA maintained that Magneti Marelli had not been put up for sale, sources have not discounted the possibility of the company being divested entirely or in parts. However, a final call is yet to be issued by the company.
Magneti Marelli, which has a workforce of around 38,000, has its footprint in 19 countries. With this, it is estimated that the automaker will be able to settle its debt and power its 48billion Eur investment plan.
The revenues of Magneti Marelli, which manufactures lighting, engines, electronics and suspension and caters to almost all automobile majors, were assessed at €6.5bn last year. Its operating profit stood at €204m.
Recently, an offer worth €2.5bn put forth by a group participated by a US buyout fund was spurned by the automobile major as the latter was firm on its stand not to sell it below 3billion Eur.
