Marelli Corporation (Formerly Calsonic Kansei Corporation) Business Report FY ended Mar. 2019

Business Results

(in millions of JPY)
  FY ended Mar. 31, 2019 FY ended Mar. 31, 2018 FY ended Mar. 31, 2017
Sales 892,100 998,600 1,012,600

Acquisition of Magneti Marelli

Aug. 2018
-Detroit Free Press reported that private equity firm KKR is in talks to buy Fiat Chrysler Automobiles' components division Magneti Marelli, which produces automotive lighting, electronics, and powertrains. The potential acquisition would mark a change of direction for FCA, which had been working on a spin-off of Magneti Marelli with its 43,000 employees. Unnamed sources said that KKR is expected to acquire Magneti Marelli through Japan-based Calsonic Kansei Corp., creating an auto parts giant that could cut costs by eliminating overlapping operations and other synergies. KKR acquired Calsonic in 2017 from Nissan Motor Co. and other shareholders for USD 4.5 billion. (Detroit Free Press article on August 22, 2018)

Sep. 2018
-Fiat Chrysler Automobiles is seeking more than EUR 6 billion for its Magneti Marelli subsidiary in exclusive sale talks with a supplier owned by KKR & Co., according to recent reports. KKR aims to pay EUR 5 billion because conditions for Fiat’s alternative plan of spinning off the division have deteriorated, according to people who are familiar with the talks. KKR would merge Marelli with its Japanese parts maker Calsonic Kansei, which is leading the talks. The difference in valuation between FCA and KKR has led to two extensions on the original August deadline to complete the discussions, and may yet derail the talks, according to the people. (From multiple sources on September 12, 2018)

Oct. 2018
-FCA Group announces that it has entered into a definitive agreement (the “Transaction”) to sell its automotive components business Magneti Marelli S.p.A. to CK Holdings Co., Ltd., a holding company of Calsonic Kansei Corporation, a leading Japanese automotive component supplier. Following the closing of the Transaction, CK Holdings will be renamed as Magneti Marelli CK Holdings. The agreement represents a transaction value of EUR 6.2 billion. The Transaction is expected to close in the first half of 2019 and is subject to regulatory approvals and other customary closing conditions. The Transaction represents a unique opportunity to combine two successful businesses to create the world's 7th largest global independent automotive components supplier, with combined revenues of EUR 15.2 billion. The new entity will operate out of nearly 200 facilities and R&D centers across Europe, Japan, the Americas, and Asia Pacific. (From a press release on October 22, 2018)

May 2019
-Fiat Chrysler Automobiles announced the completion of the sale of its automotive components business, Magneti Marelli S.p.A., to CK Holdings Co., Ltd., the holding company of Calsonic Kansei Corporation. In connection with the closing, FCA received cash consideration of approximately EUR 5.8 billion. FCA remains committed to Magneti Marelli, with the new company continuing as a key supplier, and I am confident that this transaction secures a strong future for their employees and other stakeholders,” said FCA CEO Mike Manley. This sale also recognizes the full strategic value of Magneti Marelli, improving our financial position, delivering value to our shareholders and allowing us to enhance our focus on our core product portfolio.” FCA also announced that its Board of Directors approved an extraordinary cash distribution totaling approximately EUR 2 billion from the net proceeds of the transaction. (FCA press release on May 2, 2019) (Detroit Free Press article on May 2, 2019)

-Calsonic Kansei and Magneti Marelli announced that the company will unite under one worldwide brand - MARELLI. The move to a single brand name is an important step in the integration of the two companies and positions MARELLI to compete even more effectively on a global scale. The new brand name and logo will appear on official materials in due course. The unveiling strongly signals the arrival of a new automotive global leader and positions the company for further growth across all global markets. By coming together under one name, the company will even better leverage its unique skills to boost competitiveness through an ongoing focus on innovation, upon which Magneti Marelli has built its reputation, and “Monozukuri” - the excellence in product, process and quality which Calsonic Kansei is known for. (From a press release on May 10, 2019)

Recent Technological Development

Calsonic Kansei Corporation (Calsonic Kansei) will develop an automotive air conditioning control system technology. The technology enables operation of air conditioning systems using the minimum energy by directly detecting biological signals. The company aims to establish the technology within 2-3 years. Calsonic Kansei has established an energy-saving air conditioning technology based on the thermal sensation vote of passengers. This technology is an upgraded version of the conventional air conditioning technology based on the air temperature inside the vehicle. As part of the next step, the company will accelerate the building of more energy-efficient and comfortable air conditioning systems using such technology as a heart rate sensor to gauge the metabolic state of passengers. (From an article in the Nikkan Jidosha Shimbun on March 22, 2019)

Changes to Company Names

Calsonic Kansei announced that it will change the company name of its five subsidiaries in order to reinforce a sense of unity in the group. KS Engineering will change the name to Calsonic Kansei Machineworks, CKK to Calsonic Kansei Kyushu, CKP to Calsonic Kansei Tochigi, CKF to Calsonic Kansei Fukushima and Iwashiro Seiki to Calsonic Kansei Iwashiro. The name change will be effective on April 1, 2018. (From a press release on March 12, 2018)