Fiat Chrysler Automobiles (FCA) has announced that it is selling its Magneti Marelli automotive components business to Japanese automotive component supplier Calsonic Kansei’s holding company, CK Holdings. The deal, worth 6.2 billion euros (RM29.57 billion), will create Magneti Marelli CK Holdings, the seventh-largest independent car parts supplier in the world based on total revenues.

The transaction is expected to be completed in the first half of 2019, and the new combined company will be led by Beda Bolzenius, who is currently the CEO of Calsonic Kansei. Magneti Marelli CEO Ermanno Ferrari, meanwhile, will join the Magneti Marelli CK Holdings board.

The new entity will maintain the existing Magneti Marelli operational headquarters in Corbetta, Milan, and operate out of nearly 200 facilities and research & development centres across Europe, Japan, America and the Asia-Pacific region.

It was reported that FCA will not have a stake in the new business, but FCA said it had agreed to a multi-year agreement with the new concern for the supply of components, which will ensure the sustainability of Magneti Marelli’s Italian business operations and employment levels.

Magneti Marelli, which was founded in 1919, has been a subsidiary of FCA and its predecessor companies since 1967. The company specialises in lighting, powertrains and electronics components. Calsonic Kansei is a global manufacturer of a comprehensive product line of auto parts specialising in thermal products, exhaust systems, interiors and electronics. The Saitama-based company is owned by US private equity firm KKR, which purchased it from Nissan and other shareholders two years ago.