News has emerged that South Korean electronic giant Samsung could be plotting to acquire Fiat-owned Italian auto component major Magneti Marelli.
Samsung is reported to be working on closing the deal before the end of this year. It is valued at over USD 3 billion. The news has improved FCA’s share pricing by 9%.
The electronics stalwart is said to be interested in Magneti Marelli’s lighting, in-car entertainment and telematics verticals and could purchase the whole firm. However, both Samsung and FCA refused to comment about the development.
FCA’s performance in the share market has been the worst among European automakers of late. A poor balance sheet and Sergio Marchionne’s inability to rope in a merger partner (his attempt to lure GM failed) have kept the investors skeptical about the brand. The sale of Magneti Marelli is expected to have a positive impact on FCA’s share prices.
The money generated by the sale of Magneti Marelli would be used to pay off debts and take care of product development projects which are being delayed due to lack of funds. For Samsung, acquiring a proven firm will help it make inroads in the promising auto component business.
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The acquisition would also help Samsung increase its market presence in the automotive telematics and infotainment segments.
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Via – Bloomberg.com