Fiat Chrysler in talks with Samsung and others over Magneti Marelli

Fiat Chrysler Automobiles (FCA)is in talks with South Korea's Samsung Electronics Co Ltd and others, over the sale of its components business Magneti Marelli, the carmaker's chairman, John Elkann yesterday said.

"There are ongoing talks, but nothing formal," Elkann said during a meeting of shareholders in his family's EXOR holding company, according to a Reuters report.

FCA, the world's seventh-largest carmaker, had in June rejected a €2.5 billion ($2.7 billion) offer for Magnetti Marelli, from a group, including a US buyout fund. 

FCA is seeking more than €3 billion for Magnetti Marelli, which has a market cap of €7 billion and net debt of €5.5 billion.

Magneti Marelli was founded in 1919 as a joint-venture between Fiat and Ercole Marelli, and was named Fabbrica Italiana Magneti Marelli.

With 89 production units, 12 R&D centres and 26 application centres in 19 countries, about 38,000 employees and a turnover of €7.3 billion in 2015, Magneti Marelli supplies to all leading automobile and two-wheeler makers in Europe, North and South America and the Far East.

Its business areas include electronic systems, lighting, powertrain, suspension systems and shock absorbers, exhaust systems, aftermarket parts and services, plastic components and modules and motorsport.

Samsung Group is keen on buying Magneti Marelli in order to enter into new profitable areas and has identified automotive components as a new growth driver.

But the South Korean giant is more keen on buying Magneti Marelli's lighting, in-car entertainment and telematics business, and could consider buying the whole company.

Samsung Display is already a supplier to Magneti Marelli of displays for car dashboards to the Italian company.