Fiat Chrysler (FCAU, $15.51) To Sell Off Auto Parts Segment to KKR's (KKR, $24.17) Calsonic Kansei for $7 Billion

Japan's Calsonic Kansei has agreed to buy Fiat Chrysler’s auto parts business Magneti Marelli for more than $7 billion.

Fiat Chrysler's CEO Mike Manley said that the automaker considered "a range of options" for Magneti Marelli before deciding to sell it to U.S. private equity firm KKR-owned automotive company Calsonic Kansei.

The deal between the two auto parts manufacturers is expected to rake in total annual revenues of €15.2 billion ($17.5 billion) and have nearly 200 facilities and research centers  globally for the combined business, as suggested by Fiat Chrysler. The deal could close in the first half of 2019, subject to regulatory approvals.

The announcement comes amidst  rapid evolution in the auto industry landscape, with electric cars and self-driving vehicles among major technologies at the forefront of the shift. Maybe, selling off its auto parts unit would allow Fiat to focus more on leveraging the new trends in the vehicles market.

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Sergey Savastiouk|Expert

Sergey Savastiouk, Ph.D. has a degree in Applied Mathematics from Moscow University and has extensive experience as an entrepreneur, investor, manager, and mathematician. His professional expertise is in applied mathematics, mathematical modeling, system and pattern analysis, and software and hardware system integration. He has served as the CEO of several hi-tech start-up companies and nonprofit organizations, which has given him proven capabilities in business strategy for high-tech start-up companies, market assessment, company formation, team building, product development, marketing, and sales. He has published numerous articles in journals and magazines on related fields. As a retail investor, he spent 15 years developing his proprietary trading and quantitative algorithms (now Tickeron’s A.I.), which brought him significant returns in trading the stock market. His current work and goal in founding Tickeron is to bring professional, sophisticated stock market analysis capabilities to retail investors via an easy-to-use interface.