Fiat Chrysler Automobiles NV agreed to sell its high-tech auto-parts unit, Magneti Marelli, to KKR & Co’s Calsonic Kansei in a 6.2 billion euro (US$7.15 billion) transaction, marking the first major deal for the Italian-American automaker under new chief executive officer Mike Manley.
The new merged entity would be called Magneti Marelli CK Holdings, the companies said in a statement yesterday.
Fiat Chrysler would enter into a multiyear supply agreement with its former unit that would maintain its employment levels and Marelli’s presence in Italy.
“The transaction recognizes the full strategic value of Magneti Marelli and is another important step in our relentless focus on value creation,” Manley said in the statement.
The deal creates an auto-parts maker with more than US$17 billion in annual revenue and about 65,000 workers from Tokyo to Milan. The sale is one of the first major milestones for Manley, who took over Fiat Chrysler days before the death of his predecessor Sergio Marchionne in July. It is also the first merger and acquisitions transaction overseen by chairman John Elkann since his so-called “deal maestro” passed away.
Shares in Fiat Chrysler rose 5.2 percent to 14.14 euros in Milan trading yesterday after a delayed opening.
The price for the unit is more than 1 billion euros higher than analysts’ average valuation for the business, Mediobanca said in a note.
Through Sunday, shares in the automaker had lost about 20 percent since Marchionne’s death as Italian stocks entered a bear market after the country’s new populist government failed to win investors’ confidence.
With the sale, Manley and Elkann are continuing Marchionne’s strategy of extracting value for shareholders by separating businesses from the auto division.
Under Marchionne, Fiat Chrysler’s value had risen more than 10-fold, helped by the spinoffs of supercar maker Ferrari NV and truck and tractor division CNH Industrial NV.
Simplifying the company allows Manley to focus on building and selling cars, and makes Fiat Chrysler less complex in the case of any eventual merger talks.
HEAVY INVESTMENT: Moody’s affirmed the firm’s ‘Aa3’ rating with a ‘stable’ outlook due to its leading position in the industry and ability to match customer requirements Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) revenue this year is expected to increase about 21 percent to NT$1.29 trillion (US$44.01 billion) from NT$1.07 trillion last year, driven by strong demand for advanced 5-nanometer and 7-nanometer chips mainly used in smartphones and high-performance computing devices, a Moody’s Investors Service report on Wednesday said. TSMC’s rate of revenue growth next year is to increase to 7.5 percent, the ratings agency said. The company, which supplies 5-nanometer chips for Apple Inc’s new iPad series, has introduced the advanced chips ahead of its competitors and gained a significant share of the market for the foundry industry’s
NO VIRUS BLUES: A SEMI Taiwan official said that the virus does not slow down the global semiconductor industry’s investment in manufacturing equipment The production value of the nation’s semiconductor industry is expected to grow 16.7 percent this year from last year, outpacing the global industry’s 3.3 percent growth, industry association SEMI said yesterday. That would help Taiwan safeguard its second spot in the global semiconductor market with a production value of more than NT$3 trillion (US$102.73 billion), SEMI Taiwan president Terry Tsao (曹世綸) told a media briefing in Taipei for the Semicon Taiwan trade show beginning today. The global semiconductor industry’s production value is expected to increase to US$426 billion this year, SEMI said. In terms of semiconductor equipment investment, equipment billings from Taiwanese firms
Taipei Times: When do you think the hospitality industry can return to how it was before the COVID-19 pandemic? How does Formosa International Hotels Group (FIH, 晶華酒店集團) fare this quarter and beyond? FIH chairman Steve Pan (潘思亮): The virus outbreak will have a serious impact on business travel, driven mainly by meetings, incentive travel, conferences and exhibitions over the past three decades. For the past six months, many businesspeople have grown used to exchanging information on the Internet, where more people can participate. The trend might sustain for three to five years until people are vaccinated and it is safe to
DIGITAL COMMERCE: In 2016, only 2 percent of orders were delivered in Taiwan, but that has risen to 10 percent, Foodpanda Taiwan Co operations director Nick Yu said Online food delivery platforms have seen explosive growth in Taiwan this year, helped by business opportunities related to the COVID-19 pandemic, company executives said at a digital commerce conference in Taipei yesterday. When the threat of COVID-19 kept people from going out to eat, more people experimented with ordering food deliveries online, Foodpanda Taiwan Co Ltd (富胖達) operations director Nick Yu (余岳勳) said. Foodpanda started operations in Taiwan in 2012. “We experienced 5,000 percent growth in the past 24 months,” Yu said. “That’s more than the previous six years combined.” In 2016, only 2 percent of food orders were delivered in Taiwan, but that