FCA CEO Sergio Marchionne wants to "purify" the company by focusing solely on its core operations.

Fiat Chrysler Automobiles plans to spin off its nearly century-old parts-making operation Magneti Marelli a move that is part of CEO Sergio Marchionne’s strategy to “purify” the Italian-American automaker’s focus on automotive manufacturing.

The spin-off will follow earlier divestitures of FCA’s truck and tractor operations, CNH Industrial, and supercar brand Ferrari.

“The (latest) separation will deliver value to FCA shareholders, while providing the operational flexibility necessary for Magneti Marelli’s strategic growth in the coming years,” Marchionne said in a statement. “The spin-off will also allow FCA to further focus on its core portfolio while at the same time improving its capital position.”

An FCA spokesman tweests about the planned spin-off of Megnetti Marelli.

(FCA CEO Marchionne takes home $12 mil for 2017. Click Here for the story.)

Founded 99 years ago, Magneti Marelli has been the target of spin-off rumors almost since Fiat effectively took control of Chrysler after the U.S. automaker emerged from bankruptcy.  Rumors have only accelerated over the last several years, Marchionne indicating he has wanted to focus on FCA’s core business.

More details of the separation will be “communicated in June,” the CEO said in the statement, as “a key ingredient of the 2018-2022 Business Plan.” The carmaker is expected to hold an all-day session for journalists and analysts to detail its plans.

Shares of Magneti Marelli will be listed on the Milan stock exchange, according to FCA.

An earlier plan looked at the prospect of staging an initial public offering for the parts manufacturer. The money raised would have been used to reduce FCA’s debt, one of Marchionne’s top priorities. But reports indicate that approach was ultimately vetoed by the Agnelli family – Fiat’s founders and still its primary shareholders – because of the relatively low value investors have been placing on industrial operations.

There had also been talk of selling off the unit, and Reuters has reported that FCA was approached in 2016 by South Korea’s Samsung Electronics, but a deal failed to materialize. Bain Capital also expressed interest in some of the company’s operations, as did Tenneco and Italian brake manufacturer Brembo.

(Click Here to see how FCA is hoping to turbocharge sales of the little Fiat 500.)

Boxes of Magneti Marelli parts.

The Bloomberg news service, meanwhile, last month estimated that Magneti Marelli could carry a valuation of around $5 billion, or $6.1 billion U.S.

Magneti Marelli was founded in 1919 as Fabbrica Italiana Magneti Marelli, and was a joint-venture between Fiat and Ercole Marelli, an Italian electrical manufacturing company. It initially produced magnetos for the aerospace and automotive industries.

Today, it operates 86 factories, 12 R&D centers and 26 application centers in 19 different countries with around 43,000 employees. Trade publication Automotive News ranks it as the world’s 28th-largest car parts suppliers with global sales of $8.2 billion in 2016.

(FCA accuses web developer of bribery. Click Here for more.)

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