Marelli’s headquarters and R&D center are in Saitama, Japan. (Kiyoshi Ota/Bloomberg)
key takeaways:
- Stellantis and Nissan are in talks to buy some of Marelli’s assets as the auto parts supplier reorganizes in Chapter 11 bankruptcy.
- Marelli employs more than 40,000 people and has blamed declining customer sales, tariffs and lingering supply chain problems for its financial stress.
- Marelli hopes to emerge from bankruptcy this year under lender ownership, but asset deals remain uncertain, people familiar with the talks said.
Stellantis NV and Nissan Motor Co are in talks to take over some of the assets of global auto parts maker Marelli Holdings Co, which is stuck in bankruptcy in a challenging restructuring.
Stellantis is in the news for Marelli’s suspension business in Italy and some other countries, according to people familiar with the negotiations, who asked not to be identified discussing non-public information. Nissan is considering sourcing cockpit assets from a supplier in Japan, the people said.
Marelli, created in 2019 through a private equity-backed combination of Italian and Japanese auto suppliers, is going through a complex and lengthy restructuring process after filing for Chapter 11 bankruptcy a year ago. The talks over specific assets are part of broader talks to try to save the auto parts supplier, the people said. People said that there is no certainty that deals will be done.
Representatives for Stellantis and Marelli declined to comment. Nissan did not immediately respond to requests for comment.
The component maker, which makes interiors, climate systems and automotive electronics, sought protection from US court from creditors after struggling with declining sales in key markets of customers including Jeep and Fiat maker Stellantis and Nissan. The company also blamed tariffs and lengthy supply chain problems that began during the pandemic, according to court papers.
Chapter 11 status gives Marelli relief from creditors’ demands, allowing daily operations to continue while the company attempts to reorganize its debts. Many distressed companies, like Marelli, that have significant assets in the US choose Chapter 11 because it offers a well-tested court process and the prospects for a quick recovery.
KKR & Co created the company after buying Magneti Marelli from Stellantis predecessor Fiat Chrysler for about 6.2 billion euros ($7 billion), and merged it with Calsonic Kansei, a Japanese supplier with ties to Nissan, which was already owned by the PE firm.
Magneti Marelli, founded in 1919, remains an important part of the industrial fabric of Italy’s automotive sector. In addition to Stellantis and Nissan, Marelli’s customers also include German manufacturers such as BMW AG, which are under pressure.
The assets Stellantis is considering include operations in Poland, Brazil and Mexico, the people said. It and Nissan are involved in restructuring talks due to their close working relationship with Marelli. They are also its largest unsecured creditor, according to court filings.
Marelli has received emergency funding from a group of its senior creditors. The company has said it expects to emerge from bankruptcy this year under the ownership of its main creditors. The group includes Strategic Value Partners, MBK Partners, Fortress Investment Group and Polus Capital Management.
A spokesperson for the lender group did not respond to a request for comment.
Marelli already manufactures components at some Stellantis sites, one of the people said. In addition to potential portfolio transactions, commitments regarding future orders from both Stellantis and Nissan will be key to Marelli’s Chapter 11 proceedings, the people said.
Marelli, which employs more than 40,000 people, has been on the backfoot for several years due to falling orders. Cost-cutting at Stellantis under former CEO Carlos Tavares further weakened Marelli by moving production to cheaper locations and directing supply contracts to lower-cost countries such as Morocco.
Based in Saitama, Japan, the manufacturer operates more than 150 facilities globally that also supply lighting systems and electric motors. In April, the company named Frederick Henderson as interim CEO.
Written by Alberto Brambilla, Giulia Morpurgo and Albertina Torsoli
