Oct. 22 (UPI) -- Fiat Chrysler Automobiles announced the sale of Monday of its car parts manufacturing division, Magneti Marelli, for $7.3 billion.
The buyer is Japanese parts maker Calsonic Kansei, owned by buyout specialists KKR. The sale of the Italian company will make the merged company among the largest parts suppliers in the world and put it in a better position to compete in an international industry dominated by Germany's Robert Bosch GmbH, Japan's Denso Co. and Canada's Magna International Inc.
Officials said the merged company, Magneti Marelli CK Holdings, will have $17.5 billion in annual revenue and nearly 200 facilities and research centers around the world. Calsonic Kansei's biggest customer is Nissan, while FCA is responsible for about one-third of Magneti Marelli's sales.
"The combined company will be well-positioned to serve its customers around the world due to its enhanced scale, financial strength and the highly complementary nature of its combined product lines and geographic footprint," an FCA statement on Monday said.
Divesting Magneti Marelli will allow FCA to concentrate on larger issues, including winning a larger share of China's market and catching up to competitors in the electric car market, CNN reported.
FCA stock shares rose as much as 7.2% on the Milan exchange on Monday after news of the sale was announced.
Magneti Marellui was founded in Italy in 1917 and sold to Fiat in 1967. Calsonic Kansei began in 1938 making radiators for Nissan, its largest shareholder until KKR's acquisition in 2017.