Report: KKR in Talks to Buy Magneti Marelli

New York City-based private equity firm KKR & Co. is in talks to buy Magneti Marelli, Fiat Chrysler Automobile NV’s partsmaking subsidiary, sources tell Bloomberg News.

The news service notes the Magneti has been valued at €3.2 billion-€6 billion ($3.7 billion-$7 billion). The company generated €7.9 billion ($9 billion) in revenue last year, two-thirds of it to customers outside FCA.

Reports of a possible sale first surfaced eight years ago. FCA announced in April it had authorized management to divest the unit this year, list the company on the Milan exchange and distribute its shares to FCA stockholders. Analysts say opting for an outright sale suggests that FCA believes it will gain more with that strategy than from a spinoff.

Bloomberg’s sources say KKR intends to combine Magneti with Calsonic Kansei Corp. KKR acquired the auto parts business in March 2017 after Nissan Motor Co. agreed in the previous November to sell its 41% stake in the company.