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Blog Exposure - FCA Plans to Separate Magneti Marelli's Business to Create Value for its Shareholders

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LONDON, UK / ACCESSWIRE / April 09, 2018 / Active-Investors.com has just released a free research report on Fiat Chrysler Automobiles N.V. (NYSE: FCAU) (“FCA”). If you want access to this report all you need to do is sign up now by clicking the following link www.active-investors.com/registration-sg/?symbol=FCAU as the Company's latest news hit the wire. On April 05, 2018, the Company announced that its Board of Directors had approved the separation of Magneti Marelli S.p.A's business. Accordingly, the Board has authorized the Company's management to come up with a plan and implement it. Magneti Marelli is the Company's auto component brand that designs and manufactures a vast range of state-of-the-art lighting, powertrain, electronic systems, and aftermarket parts. Register today and get access to over 1,000 Free Research Reports by joining our site below:


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Details of the Separation of Magneti Marelli's business

As per the directions of the Company's Board, FCA's management will develop and implement a plan to separate Magneti Marelli's business from FCA. Following the separation of the business Magneti Marelli will be listed as an independent company and its shares are expected to be listed on the Milan Stock Exchange. FCA plans to distribute the shares of the new holding Company for Magneti Marelli to FCA's shareholders. The Company expects to complete the entire separation by the end of FY18 or in early FY19.

The transaction of separating Magneti Marelli's business is subject to regulatory approvals and other closing conditions. FCA reserves the right to modify or terminate the proposed transaction at any time and for any reason and does not guarantee regarding the time taken or for the separation transaction will be completed.

FCA believes that the separation of Magneti Marelli's business will allow the Company to concentrate on its core business while simultaneously improving its cash position. The transaction will also deliver great value to FCA's shareholders. Magneti Marelli will also benefit from the transaction as it will get the necessary operational flexibility to plan its future growth strategy as an independent entity.

Commenting on the FCA Board's decision, Sergio Marchionne, CEO of FCA, said:

“A separation of FCA and Magneti Marelli is a key ingredient of the 2018-2022 Business Plan which will be communicated in June. The FCA's Board of Directors are confident that this separation is the proper next step, and will be beneficial for Magneti Marelli, FCA and our shareholders.”

FCA has been considering the spin-off of the auto parts business under Magneti Marelli brand for quite some time. The aim was to separate some of its businesses and utilize sales proceeds to pay off its debts. The decision would also help unlock value for the Agnelli family (FCA's main shareholder) and other shareholders of the Company. Finally, in end of February 2018, FCA announced that it is conducting a strategic review for potential separation of Magneti Marelli's business as part of FCA's 2018-2022 business plan. The current decision comes in just a few days ahead of FCA's 2018 Annual General Meeting of Shareholders scheduled for April 13, 2018.

About Magneti Marelli S.p.A

Founded in 1919. Milan, Italy-based Magneti Marelli is an international company in the business of design and production of hi-tech systems and components for the automotive sector. Its range of systems and components include Electronic Systems, Automotive Lighting, Powertrain, Suspension Systems, Exhaust Systems, Motorsport, Plastic Components and Modules, After Market Parts and Services, etc. The Company is a leading supplier to leading car makers in Europe, North and South America, and Asia.

Magneti Marelli has 86 production units and 14 R&D Centers and is supported by a team of around 43,000 employees. The Company's turnover for FY16 was €7.9 billion.

About Fiat Chrysler Automobiles N.V.

FCA is a global automotive Group that designs, engineers, manufactures, and sells vehicles and related parts and services, components and production systems. Some of the leading auto brands of FCA include Abarth, Alfa Romeo, Chrysler, Dodge, Fiat, Fiat Professional, Jeep, Lancia, Ram, Maserati. Its other brands include Mopar, the parts and service brand. The Company's other businesses include Comau (production systems), Magneti Marelli (components), and Teksid (iron and castings). The Company has a global presence with operations in 40+ countries, 159 plants, and 87 R&D Centers and dealers and distributors in more than 140 countries.

The Group is supported by a global team of over 236,000 employees. FCA's net revenues for FY17 was €111 billion.

Stock Performance Snapshot

April 06, 2018 - At Friday's closing bell, Fiat Chrysler Automobiles' stock declined 1.20%, ending the trading session at $22.31.

Volume traded for the day: 3.85 million shares.

Stock performance in the last month – up 3.77%; previous three-month period – up 8.04%; past twelve-month period – up 121.58%; and year-to-date - up 25.06%

After last Friday's close, Fiat Chrysler Automobiles' market cap was at $34.30 billion.

Price to Earnings (P/E) ratio was at 8.10.

The stock is part of the Consumer Goods sector, categorized under the Auto Manufacturers - Major industry.


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