US-based O’Reilly Automotive has submitted a cash offer for Genuine Parts Company’s auto-parts division.
Bloomberg, citing unnamed sources, reported that the division could be worth $10bn or more in any transaction, with an announcement on a potential sale possible by late summer.
Genuine Parts may nonetheless choose to hold onto the unit or pursue a spinoff separate from O’Reilly, the sources cautioned, noting that a rival bidder could still surface.
Genuine Parts announced in February that it was working with advisers JPMorgan and Guggenheim Securities to separate its auto-parts operations and transition into a pure-play industrials company.
The move followed a cooperation agreement reached with activist investor Elliott Investment Management.
At the time, Genuine Parts chief executive Will Stengel said: “Over the past decade, we established leading global footprints in attractive geographies, simplified our business mix and accelerated strategic investments to advance and differentiate our business.
“Creating two focused, independent companies sharpens customer and market alignment, increases clarity and speed, simplifies operations and enables disciplined, business-specific investments to unlock long-term value.”
The auto-parts division, widely recognised for its Napa brand, runs more than 10,000 locations globally and posted sales exceeding $15bn last year.
The business serves an estimated $200bn automotive aftermarket and is advancing technology and supply-chain initiatives aimed at improving growth and margins.
Should the separation proceed, Genuine Parts would keep its global industrial operations, which trade under the Motion brand and focus on industrial maintenance and repair services, generating roughly $9bn in revenue last year.
O’Reilly Automotive, headquartered in Springfield, Missouri, is a specialty retailer of car parts and accessories.
A transaction for the unit would mark O’Reilly’s largest since 2008, when it purchased CSK Auto for approximately $1bn, according to figures compiled by Bloomberg.
“O’Reilly eyes $10bn bid for Genuine Parts’ auto unit – report” was originally created and published by Just Auto, a GlobalData owned brand.
