Motherson offers to acquire Marelli of Japan
Indian auto parts supplier Motherson Group is set to submit an offer to acquire Japan-based Marelli Holdings from US private equity firm KKR & Co. The deal would involve Motherson buying Marelli's debt at 20 cents to a dollar, while KKR would write off its entire equity, said a banking source.
A majority of Marelli's lenders, including a consortium of Japanese banks led by Mizuho Bank, are reportedly in favour of the deal. The lenders currently hold the majority of Marelli's $4.2 billion debt and would need to agree to a debt haircut, according to sources.
Marelli's performance has improved recently, with its operating income turning positive and its 2024 margin higher than 2023. KKR had written off its $2 billion investment in 2022 but injected $650 million in new capital to support the company's turnaround.
A successful acquisition would mark a significant leap for Motherson, positioning the company among the world's top automotive parts suppliers. Marelli is a key supplier to global automakers like Nissan Motor Co. and Stellantis.
The deal comes amid growing uncertainty in the global auto industry, with Fitch Ratings revising its outlook for the sector to 'deteriorating' from 'neutral' due to escalating tariff risks and declining volumes in key markets.
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