ROME, Oct. 22 (Xinhua) -- Fiat Chrysler Automobiles (FCA) announced Monday it is selling its Magneti Marelli automotive components division to leading Japanese automotive components supplier Calsonic Kansei.
The transaction valued at 6.2 billion euros (about 7.1 billion U.S. dollars) will result in a new company called Magneti Marelli CK Holdings with combined revenue of 15.2 billion euros, FCA said in a statement.
"The combined businesses... will create the world's seventh largest global independent automotive components supplier based on total revenues," the statement said.
Under terms of the deal FCA will enter into a multi-year supply agreement with Magneti Marelli CK Holdings, and the combined entity is committed to maintaining Magneti Marelli's operations in Italy and to sustain its employment levels.
Founded in Italy in 1919, Magneti Marelli employs about 43,000 people and has 85 production units and 15 R&D centers across 20 countries in Europe and the world, including Argentina, China, India, Japan, Russia, and Turkey, according to its corporate website.
It designs and manufactures high-tech electronic, lighting, engine, suspension, and exhaust systems for cars and supplies all the leading car makers in the Americas, Asia, and Europe, posting turnover of 7.9 billion euros in 2016, according to the website.
Based in Japan's Saitama City, Calsonic Kansei was founded in 1938 and as of March 31 this year, it posted sales worth 998.6 billion Japanese yen (about 8.9 billion U.S. dollars) in sales and employed almost 23,000 people, according to its corporate website.
Its products include air conditioning units, electronic components, and instrument panels for clients including Audi, General Motors, Jaguar, Peugeot, Volkswagen, and all the Japanese automakers.
Magneti Marelli CK Holdings will be headquartered at the existing Magneti Marelli operational HQ in Corbetta, Milan, and will operate out of nearly 200 facilities and R&D centers across Europe, Japan, the Americas, and the Asia Pacific region.
It will be led by current Calsonic Kansei CEO Beda Bolzenius, who said that together, the two companies will "benefit from complementary geographic footprints and product lines" to create a "competitive automotive supplier which is extremely well-placed among the global Top Ten".
Current Magneti Marelli CEO Ermanno Ferrari, who will join the board of directors of the new company, added that the deal will lead to a "global business of exceptional range", and this will be an opportunity "for all our people" to be part of "a secure, growing company of considerable scale".
According to FCA CEO Mike Manley, the combined business will be "among FCA's most important business partners" and that the transaction "recognizes the full strategic value of Magneti Marelli".