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Fiat Chrysler to sell cast iron components business to Brazil's Tupy for €210M

Fiat Chrysler Automobiles NV agreed to sell its global cast iron automotive components business to Brazil's Tupy SA for €210 million, according to Dec. 20 announcements from both companies.

The transaction includes FCA subsidiary Teksid SpA's global assets and production facilities in Brazil, Mexico, Poland and Portugal. Additionally, Teksid's interest in a joint venture in China, its engineering office in Italy and the sales office in the U.S. will also be transferred to Tupy, which develops and manufactures engineered cast iron structural components.

FCA will continue to own Teksid's aluminum business.

The proposed transaction is subject to antitrust approvals and is expected to close in the second half of 2020.

The acquisition will allow Tupy to expand its business, especially to the Asian market. The transaction is also expected to strengthen Tupy's strategic partnership with FCA, which will remain a significant customer of the combined entity as part of a long-term supply arrangement.

"Together, Teksid and Tupy will continue to develop new technologies to support the continued success of our products," said Scott Garberding, FCA's global chief manufacturing officer.

"The combined strengths of both companies will lead to more efficient asset utilization and faster responses to the global capital goods industry cyclicality, key factors in creating value for customers and ensuring long-term sustainability of the value chain," Tupy said in a statement.

Tupy and Teksid's cast iron automotive components business generated total revenues of more than €1.5 billion in 2018.

Banco Morgan Stanley SA acted as exclusive financial adviser to Tupy, while J.P. Morgan provided the financing for the transaction. Cleary Gottlieb Steen & Hamilton acted as legal counsel to Tupy.