Fiat mulls new Marelli offers after low KKR bid

By BLOOMBERG

MILAN • Fiat Chrysler Automobiles NV will evaluate other potential buyers for its Magneti Marelli parts unit because the carmaker views a bid made by KKR & Co as too low, people familiar with the matter said.

KKR offered less than the €6 billion (RM28.96 billion) minimum valuation sought by Fiat, which ended the exclusivity of the talks, said the people, who asked not be named because the talks are confidential.

The Italian carmaker can now evaluate other inquiries received for the unit, while it prepares to eventually separate the Milan-based company and distribute shares to investors, another viable way to extract value and simplify the group’s structure.

The US fund wanted to pay around €5 billion for Marelli because conditions for Fiat’s alternative plan of spinning off the division have deteriorated, people familiar with the matter said on Sept 12.

Talks with KKR, which would merge Marelli with its Japanese parts maker Calsonic Kansei, could still revive if the private-equity firm raises its valuation, the people said. Fiat’s board in April approved the plan to spin off the auto-parts unit.

Fiat and KKR declined to comment. Fiat shares fell 0.8% to €14.86 at 9:12am yesterday in Milan trading, giving it a market value of €23 billion.

The sale of Marelli would become one of the first major milestones for Fiat Chrysler CEO Mike Manley, who took over on July 21, days before predecessor Sergio Marchionne died. Marchionne, who had favoured a separation of the business by distributing shares to investors, had said Fiat was open to changing its mind for a “big check”.

Without the right price, the preferred route remains the spin-off of Marelli, which was approved by its board in April, the people said.