TURIN, Italy - Fiat S.p.A. has appointed two investment bankers to act as financial advisers for the breakup of Magneti Marelli.
Meanwhile, sources say Fiat is ready to sell Marelli's Suspension Systems division to Germany's ThyssenKrupp Automotive AG for more than $459.3 million.
Investment bankers Lazard and Schroeder Salomon Smith Barney will help guide the sale of Fiat's components subsidiary. Marelli's business units will be sold off piecemeal.
A deal with Visteon Corp. to take over most of the Italian parts maker collapsed late last year.
ThyssenKrupp Automotive makes body systems, chassis modules, powertrain components and systems, suspensions, steering systems and drivetrains. It reported 1999 revenues of more than $5.5 billion.
Suspension Systems is Marelli's newest division. It was formed in 1999 after Marelli was required to take over Fiat Auto's suspension plants in Italy, Poland, Turkey and Brazil for $199 million. The suspension activities were merged with Brazilian shock absorber maker Cofap, which was acquired by Marelli in October 1997.
Groups on the block
The new division generated $651 million of revenues in 1999. Revenues grew 68 percent to $488.6 million in the first half of 2000.
Revenues were $488.6 million in the first half of 2000, up 68 percent from the same period in 1999.
Lazard and Schroeder Salomon Smith Barney will try to sell three Marelli divisions that represent more than 60 percent of the supplier's projected revenues of $4.13 billion in 2000. They are Powertrain Systems, Interior and Body Systems, including heaters and cooling systems, which includes Automotive Lighting, andElectronic Systems.
According to sources, Fiat hopes to raise between $2.29 billion and $2.75 billion from the Marelli breakup. That includes the funds from the sale of the Suspension Systems division to ThyssenKrupp.
Sales net $597 million
In the past 18 months, Fiat S.p.A. has raised almost $597 million through the sale of Marelli's lubricants unit, rotating machines, rear-view mirrors, plus its exit from the mechanical components and carburetor businesses.
Not part of Marelli's plans, according to sources, is the 500-outlet Midas Europe service chain. That unit is expected to go to Fiat Auto. Also excluded is a 50 percent stake in Viasat, a joint venture with Telecom Italia that is Europe's competitor to GM's OnStar system.
Last July, Fiat launched a bid for the 30 percent of Magneti Marelli it didn't already own. At the time, Fiat valued Marelli at $1.56 billion.
Marelli is the world's 22nd largest supplier and the ninth largest in Europe, employing 25,600 people in 57 plants in 23 countries.