Marelli, a major automotive supplier to Nissan, Stellantis, and other companies, has approximately 50,000 employees worldwide across 170 facilities. It filed for Chapter 11 bankruptcy protection in the US beginning this week. It says to be one of the first major victims of the tariff wars due to its import/export-focused business.
Under Chapter 11, a company is protected from its creditors and allowed to continue operations while restructuring. Major creditors include Stellantis with $454 million and Nissan with $313 million, as well as German automotive supplier Bosch ($45 million), Mazda ($30 million), and Tesla ($22 million).
Securing $1.1 billion from lenders
Marelli’s current owner, private equity firm KKR, has stated that it has secured $1.1 billion in financing from its lenders, with approximately 80% of the lenders having signed an agreement to support its restructuring, according to the company’s statement.
The lenders of the $1.1 billion financing will acquire KKR’s share in the business and take ownership once it emerges from Chapter 11, subject to a 45-day so-called ‘overbid process’ during which other parties may bid for it.
“Throughout this process and moving forward, Marelli does not expect any operational impact from the Chapter 11 process, and the Company will continue to work closely with its customers, suppliers, and partners to innovate and invest in its portfolio of advanced technologies that will differentiate the vehicles of the future and transform mobility,” Marelli states on its website.
Fiat’s supplier
Marelli was founded in 1919 as Fabbrica Italiana Magneti Marelli, a joint venture of Fiat and Ercole Marelli. It was initially a maker of ignition magnetos but later specialized in electronics, lighting (including xenon, LED, and laser), powertrains, navigation, and motorsport technology. In the F1 motorsport, innovations were introduced, including the semi-automatic gearbox (1989), telemetry systems, and KERS.
It later became Magneti Marelli, a unit of Fiat (FCA), and subsequently, Stellantis. In October 2018, private equity firm KKR acquired Magneti Marelli from Fiat Chrysler for approximately €6.2 billion, merging it with its 2017 acquisition, Japanese Calsonic Kansei.
Radiators for Nissan
That company was founded in Japan in 1938 as Nihon Radiator Manufacturing and was renamed Calsonic in 1976. It had close ties with Nissan since 1954, as it became a sole supplier of radiators to the Japanese carmaker. It merged with instrument cluster specialist Kansei Corp. in 2000 to form Calsonic Kansei.
The unified brand ‘Marelli’ was launched in May 2019, combining Japanese precision and Italian innovation under one global identity. However, merging both cultures, especially under the creditors, proved to be a challenging task.
Restructuring plan
Hit hard by the pandemic crisis and unable to get its finances back on track, Marelli put forward a restructuring plan that included a buyout by India’s Motherson Group, according to a report by the Japanese newspaper Nikkei last month. The proposal, however, was unable to bridge the gap between Japanese and foreign creditors at the time.
Now, the tariff war initiated by President Trump twisted Marelli’s neck further, and it’s in the hands of the US Court to bring the creditors into line with each other and allow the company to restructure and refocus. A process that can take several months or even several years, analysts warn.
Nissan, itself in troubled waters, said in a statement: “We appreciate Marelli’s efforts to minimize operational disruption.” It added that it was committed to supporting Marelli and would coordinate with other Marelli customers, as well as monitor the supply chain to prevent disruptions.
