Fiat Chrysler Automobiles NV would evaluate other potential buyers for its Magneti Marelli parts unit because the automaker views a bid made by KKR & Co as too low, people familiar with the matter said.
KKR offered less than the 6 billion euro (US$6.99 billion) minimum valuation sought by Fiat, which ended the exclusivity of the talks, said the people, who asked not be named because the talks are confidential.
The Italian automaker can now evaluate other inquiries received for the unit while it prepares to eventually separate the Milan-based company and distribute shares to investors, another viable way to extract value and simplify the group’s structure.
The US fund wanted to pay about 5 billion euros for Marelli, because conditions for Fiat’s alternative plan of spinning off the division have deteriorated, people familiar with the matter said on Wednesday last week.
Talks with KKR, which would merge Marelli with its Japanese parts maker Calsonic Kansei, could still revive if the private equity firm raises its valuation, the people said.
Fiat’s board in April approved the plan to spin off the auto parts unit. Fiat and KKR declined to comment.
Market conditions for a spinoff and a listing of the unit on the Milan stock-exchange have deteriorated in the past few months as global trade tensions and profit warnings from automakers such as Fiat Chrysler, as well as suppliers like Continental AG, have eroded confidence in the industry.
Volvo Cars earlier this month delayed plans for a share sale, saying that the timing was “not optimal.”
The backtracking from the plans, which were said to involve a share sale as early as this fall in Sweden and Hong Kong, shows the worsening strain from trade conflict.
Still, luxury automaker Aston Martin is pushing ahead with a London initial public offering.
Before embarking on talks with KKR, Fiat fielded interest for the auto parts business from other potential buyers including Apollo Global Management, an unnamed Asian parts supplier and Bain Capital, people familiar with the matter said last month.
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