FCA Readies Magneti Marelli for Spinoff

Fiat Chrysler Automobiles NV has set up an Italian company called MM Srl to prepare its Magneti Marelli parts unit to be spun off as a Netherlands-registered company.

FCA said previously that it aims to complete the separation by early 2019. Reuters cites a document that shows MM will be an entity that comprises Magnet Marelli’s electronics, racing-related electro-mechanical business and more than a dozen holdings in several countries.

MM, which is comparable to a U.S. limited liability company, will later be incorporated into a Dutch holding company through a merger, the document indicates. Reuters notes that the maneuver FCA CEO Sergio Marchionne used to spin off and list its Ferrari and CNH Industrial units.

In those cases, long-term investors could gain shares with multiplied voting rights, while unlocking value. Reuters notes that analysts have estimated Magneti Marelli is worth between €3.6 billion and €5 billion ($4.2 billion-$5.8 billion).