marelli: Motherson closes in on acquisition of auto parts company Marelli

Vivek Chand Sehgal’s Motherson Group is in an advanced stage of talks to acquire Italian auto component maker Marelli, owned by private equity firm KKR, in what would be the Indian company’s biggest ever acquisition, people familiar with the matter said. .

People, speaking on condition of anonymity, said a deal is likely to be announced in late May or early June. He did not disclose any possible financial terms or how Motherson Group will fund the deal.

If the acquisition is completed, India’s largest automobile component maker will propel the conglomerate to break into the global top ten in this segment.

Emails to Motherson Group and Marelli seeking comment did not receive a response as of press time on Monday.

Marelli posted revenue of more than $11 billion in 2021, roughly the same as Motherson Group.

The acquisitions have contributed significantly to the growth of Motherson Group. It has made 29 acquisitions so far, five of them, including China, Mexico and Turkey, since the start of the pandemic. According to people, talks are on for the acquisition of six more companies. The deals are part of its plan to take the group’s business to $36 billion by 2025.

Marelli was created in 2019, when KKR merged Calsonic Kansei, which it acquired from Nissan in 2017 for $7.1 billion, with Magneti Marelli.

In March 2022, the company, with total liabilities of $8.2 billion, went for a debt restructuring and settlement. This is not the first time Motherson Group has bid for a big company. Many of the deals were for financially struggling companies, which it acquired and then turned around.

Motherson Group had a long relationship with Magneti Marelli and Calsonic Kansei as joint ventures with both to produce suspension, automotive lighting and HVAC systems in India.

Motherson Group has restructured and created verticals under Wiring Business and Automotive Lighting Business. It is also diversifying into non-automotive businesses including aerospace, logistics and healthcare, from which it aims to generate $9 billion in revenue by 2025.

Of the six other companies it is in talks with, the auto parts maker is very close to acquiring a tooling company, people said. It is also planning to set up a new entity for polymer business.

The group missed its five-year target of achieving $19 billion in revenue in 2020.

“We have taken a step back considering the situation and we are hopeful that we will be able to get some part of it in the current five-year plan,” Sehgal told ET.

Originally published at Pen 18