The massive smartphone recall is apparently a hot button issue

Fiat Chrysler Automobiles (FCA) just can’t seem to catch a break lately. Rumor has it that negotiations between FCA and Samsung Electronics over the sale of Magneti Marelli have halted as Samsung scrambles to fix issues with its Galaxy Note 7 smartphone, once again obstructing FCA’s plans to reduce its debt and raise some much needed capital.

That’s the latest from Automotive News, which cites unnamed sources familiar with the deal.

Magneti Marelli is an Italian auto parts producer that was founded in 1919 and has been part of Fiat since 1967. Samsung was reportedly on its way to buying some or even all of the company, with some estimates placing the deal at around $3 billion.

However, according to Automotive News, Samsung and FCA have yet to agree on a valuation or even a deal structure for the sale of Magneti Marelli. With Samsung now under fire with a massive recall of one its most important products, it’s looking less likely that a deal between FCA and the tech producer will be found before the end of the year.

Continue reading for the full story.

Why It Matters

In case you were unaware, Samsung has had a few issues with its Galaxy Note 7 smartphone as of late. And by “a few issues,” I mean the phone has a tendency to burst into flames.

Samsung has issued a recall, but it’ll be a while before the beleaguered South Korean technology producer gets it all sorted out. Even after putting the issue behind it, it’s possible Samsung won’t be in a position to venture into auto parts production with a major acquisition like Magneti Marelli.

And that’s bad news for FCA. After publicly failing to find an automotive partner to join forces with, FCA started looking into technology, and earlier this year announced a joint project with Google to explore autonomous driving tech.

Following that up by selling off Magneti Marelli would be a boon for FCA, as it would take a sizable chunk out of the automaker’s considerable debt. But with Samsung now throwing the brakes on the deal, it’s possible FCA will need to shop elsewhere.

Source: Automotive News

Jonathan Lopez
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