Samsung Electronics in talks to buy Italian auto-parts maker Magneti Marelli from Fiat Chrysler

Samsung Electronics Co, a division of South Korean conglomerate Samsung Group, is in advanced talks to buy some or all of the operations of auto-parts maker Magneti Marelli from Fiat Chrysler Automobiles NV, Bloomberg yesterday reported, citing people familiar with the matter.

Samsung is more keen on buying Magneti Marelli's lighting, in-car entertainment and telematics business but could consider buying the whole company, which could be worth around $3 billion, the report said.

A successful deal could be Samsung's biggest acquisition outside South Korea this year.

In July last year, reports surfaced that Fiat, the world's seventh-largest carmaker, was weighing plans to sell Magneti Marelli after receiving interest from potential buyers. (See: Fiat Chrysler explores sale of auto parts unit Magneti Marelli for $3.3 bn)

At that time, Fiat had rejected a €2.5 billion ($2.7 billion) offer for Italy-based Magnetti Marelli, from a group, including a US buyout fund, since it would not agree to sell for less than €3 billion.

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.

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

It has a market cap of €7 billion and net debt of €5.5 billion.

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.

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