Samsung Galaxy Note 7 disaster endangers FCA's Magneti Marelli sale
Thu, Oct 13 2016
FCA was in talks with the South Korean tech giant to sell all or a portion of Magneti Marelli, the enormous Italian parts supplier. The deal, estimated to be in the $3 billion range, was a big part of FCA CEO Sergio Marchionne's five-year plan to slash his company's ˆ5.5 billion ($6.07 billion at today's rates) debt. But Samsung's flaming phones may have stalled the deal, Automotive News reports.
Samsung was hoping to acquire all or part of Magneti to gain access to its lighting, in-car entertainment, and telematics business, all in a bid to reduce its reliance on occasionally explosive consumer electronics, AN's sources report.
This week alone, Samsung permanently ended production of the Note 7 and began recalling millions of devices, sending out flame-proof return boxes so owners can ship the device back in relative safety. The disaster has already caused Samsung to slash its third-quarter operating profit by $2.3 billion, and is leading the company to divert its attention away from big, blockbuster deals, people "who asked not to be identified because the negotiations are private" told AN. According to the same sources, the two sides haven't even agreed on a valuation for Magneti Marelli.
Neither company was willing to comment on the potential sale.
Related Video:
- News Source: Automotive News - sub. req.
- Image Credit: Andrew Zuis / AP
By Brandon Turkus
See also: Recharge Wrap-up: Renault-Nissan at COP22, BMW launches Cruise e-Bike, Recharge Wrap-up: Renault-Nissan at COP22, BMW launches Cruise e-Bike, Dodge revamping lineup with AWD Challenger and lighter Charger.