Marchionne’s Successors Prepare To Spin Off Another Part Of FCA

Fiat Chrysler Automobiles is in the midst of a leadership crisis as its longtime CEO Sergio Marchionne struggles to recover from surgery. But with his successors now taking their places on both sides of the Atlantic, business will have to proceed as usual sooner or later. And when it does, that looks slated to include spinning off one of its biggest units.

According to Reuters, FCA was already gearing up to separate Magneti Marelli into a separate entity before Marchionne’s health threw the company into crisis. The news outlet reports having seen documents showing the creation of a new entity called MM Srl, ostensibly paving the way towards the division’s spin-off.

The electronics and electrical-component division has been under the Fiat umbrella since its acquisition way back in 1967. The operation encompasses some 43,000 employees at over a hundred facilities in 19 countries around the world. It’s been touted as the subject for a potential sale or spin-off for several years, with talks between FCA and Samsung having taken place (but ultimately collapsed) just two years ago.

Now it appears that FCA is preparing to spin Magneti Marelli off into its own unit, register it in the Netherlands, and potentially list its stock on the open exchange. It wouldn’t be the first time that FCA would undertake such a move, after all, having done the same with Ferrari and CNH Industrial in recent years.

Reuters values Magneti Marelli at around $5 billion. Some of the proceeds from its Initial Public Offering would return to FCA’s current stakeholders – particularly the Agnelli/Elkann family which, through its Exor holding company, owns over 29 percent of FCA (as well as nearly 27 percent of CNH and 23 percent of Ferrari).

The question at this point may come down to when Marchionne’s successors will move to complete the spin-off in his absence.

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  • kachuks

    Can’t find info on what is wrong with him. How does a shoulder surgery threaten your life? Possibly developed an infection that went unnoticed?

    • Mr. EP9

      Maybe. It does seem weird.

    • europeon

      He’s in a coma. Lots of things can happen even with a simple surgery.

      • LeStori

        Yes, like accidents, the best one is the one is the in which you are not involved.

      • Miknik

        Indeed. A simple undetected infection or a thrombosis can cause massive problems in routine operations;

    • Michelin

      He would be in oncology department of Zurich University hospital …..

  • europeon

    It’s not news. There were talks about MM’s spinoff for years, and this is not something you do overnight, it takes months, if not years, to set everything up. Most likely the decision has been taken long ago, and it’s a matter of just making it official… if this is true.

    • LeStori

      It is a planned spin off
      . “The spin-off is part of a plan by FCA Chief Executive Sergio Marchionne
      to “purify” the Italian-American carmaker’s portfolio and to unlock
      value at Magneti Marelli.”

      So predates his “illness”.

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