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.
ARTIFICIAL INTELLIGENCE: The chipmaker last month raised its capital spending by 28 percent for this year to NT$32 billion from a previous estimate of NT$25 billion Contract chipmaker Powerchip Semiconductor Manufacturing Corp (力積電子) yesterday launched a new 12-inch fab, tapping into advanced chip-on-wafer-on-substrate (CoWoS) packaging technology to support rising demand for artificial intelligence (AI) devices. Powerchip is to offer interposers, one of three parts in CoWoS packaging technology, with shipments scheduled for the second half of this year, Powerchip chairman Frank Huang (黃崇仁) told reporters on the sidelines of a fab inauguration ceremony in the Tongluo Science Park (銅鑼科學園區) in Miaoli County yesterday. “We are working with customers to supply CoWoS-related business, utilizing part of this new fab’s capacity,” Huang said, adding that Powerchip intended to bridge
Microsoft Corp yesterday said that it would create Thailand’s first data center region to boost cloud and artificial intelligence (AI) infrastructure, promising AI training to more than 100,000 people to develop tech. Bangkok is a key economic player in Southeast Asia, but it has lagged behind Indonesia and Singapore when it comes to the tech industry. Thailand has an “incredible opportunity to build a digital-first, AI-powered future,” Microsoft chairman and chief executive officer Satya Nadella said at an event in Bangkok. Data center regions are physical locations that store computing infrastructure, allowing secure and reliable access to cloud platforms. The global embrace of AI
INFLATION WATCH: A rate hike in March would help keep inflation at 2.16 percent this year, although a weak currency and higher electricity rates are an issue, S&P said Moody’s Ratings and S&P Global Ratings have reaffirmed Taiwan’s sovereign credit ratings at “As3” and “AA+” respectively with a stable outlook on the back of high income and wealth levels, a strong institutional framework and robust external positions. The affirmations came as Taiwan’s economy is gaining momentum after quarters of slowdown induced by stubborn global inflation and monetary tightening. Taiwan’s strong fiscal and external buffers have improved relative to peers as evidenced by recent shocks linked to the COVID-19 pandemic and the ongoing US-China technology dispute, the two ratings firms said. “Taiwan stands as the epicenter of the global semiconductor supply chain, accounting
RIDING AI WAVE: : Most of its NT$15bn capital budget would be spent on packaging technologies used in AI and HPC chips and advanced testing technology, it said Chip testing and packaging service provider Powertech Technology Inc (PTI, 力成科技) plans to increase this year’s capital expenditure by 50 percent to expand capacity to meet growing demand for advanced memorychips used in artificial intelligence (AI) products. The company proposed to spend NT$15 billion (US$460.94 million) to expand advanced capacity and equipment, compared with a budget of NT$10 billion it planned three months ago. “We are seeing a recovery in market demand as well as new business opportunities. We will spend heavily on advanced packaging” equipment, Powertech chief executive officer Boris Hsieh (謝永達) told investors on Tuesday. “We will focus on ramping