Marelli: KKR's $11.5B Auto Parts Bet Goes to Lenders

Marelli Holdings Co., Ltd., the Japan-based Tier 1 automotive supplier formed from KKR's approximately $11.5 billion investment combining Calsonic Kansei and Magneti Marelli, filed for chapter 11 bankruptcy protection on June 11, 2025, in the U.S. Bankruptcy Court for the District of Delaware. The company—employing over 46,000 people across 58 manufacturing centers in 24 countries—entered bankruptcy with approximately $4.9 billion in funded debt after years of distress from COVID-19 disruptions, tariff exposure, declining demand from OEM customers Stellantis and Nissan, and underperforming electric vehicle contracts. Through a prearranged restructuring supported by 80% of its lenders, Marelli secured $1.1 billion in debtor-in-possession financing and expects to emerge in 2026 under 100% ownership of its lender consortium.

The case represents a complete change of control from private equity sponsor KKR to a group of senior lenders who will eliminate approximately $4.9 billion in secured debt entirely through the restructuring. General unsecured creditors, including Stellantis and Nissan with combined claims of $767 million, are to be paid in full under the restructuring support agreement terms while secured lenders take the reorganized equity in lieu of debt recovery.

Debtor(s)	Marelli Automotive Lighting USA LLC
Court	U.S. Bankruptcy Court, District of Delaware
Case Number	25-11034 (jointly administered)
Judge	Hon. Craig T. Goldblatt
Petition Date	June 11, 2025
Plan Type	Prearranged RSA-Backed Restructuring
Status	Pending (as of January 2026)
Expected Emergence	2026
Total Funded Debt	~$4.9 billion
DIP Facility	$1.1 billion new money (plus 47.5% roll-up)
Employees	~46,000 globally; ~4,000 in U.S.
Creditors	100,000+
Exit Structure	DIP lenders own 100% of reorganized company

KKR's $11.5 Billion Roll-Up

The Marelli restructuring is tied to the private equity roll-up strategy that created the company. KKR assembled Marelli through two major acquisitions totaling approximately $11.5 billion, combining a Japanese automotive supplier with ties to Nissan with an Italian components manufacturer with long ties to Fiat. The resulting enterprise combined operations across lighting, powertrain, electronics, and interior systems.

Calsonic Kansei acquisition (2016-2017). On November 22, 2016, KKR announced the acquisition of Calsonic Kansei Corporation from Nissan Motor for $4.5 billion, making its first major move into tier-one automotive supply. Calsonic Kansei itself had been formed through a 2000 merger between Calsonic Corporation, which manufactured air conditioners and heat exchangers, and Kansei Corporation, a gauges and instrumentation supplier. By March 23, 2017, KKR completed the tender offer, taking Calsonic Kansei private and establishing it as the platform for further auto parts consolidation. The company maintained ties to Nissan—its historical parent—as a key customer relationship.

Magneti Marelli acquisition (2018-2019). Eighteen months after closing Calsonic Kansei, KKR announced the second acquisition. On October 22, 2018, KKR-owned Calsonic Kansei announced a merger with Magneti Marelli, the automotive components subsidiary of Fiat Chrysler Automobiles, in a transaction valuing Magneti Marelli at 6.2 billion euros (approximately $7.2 billion). Magneti Marelli was founded in 1919 as Fabbrica Italiana Magneti Marelli, a joint venture between Fiat and Ercole Marelli. The company had been a subsidiary of FIAT (now Stellantis) from 1967 until its sale to KKR. At the time of acquisition, Magneti Marelli operated 86 manufacturing plants, 12 R&D centers, and 26 application centers across 19 countries, with 43,000 employees and turnover of 7.9 billion euros. On May 2, 2019, CK Holdings (the Calsonic Kansei holding company) completed the acquisition, and the combined entity was rebranded under the Marelli name.

Combined enterprise scale. The merger created an automotive components company with a combined enterprise value of approximately 15.8 billion euros, combined revenues of approximately 15 billion euros, a workforce of approximately 170,000 employees, and approximately 200 facilities globally. Marelli develops and produces components and systems including advanced lighting, powertrain solutions, electronics, suspension, and exhaust systems. The company supplied major automotive OEMs in Asia, Europe, North America, and South America, with Stellantis and Nissan representing the largest customer relationships inherited from the respective pre-merger parents.

The Path to Financial Distress

The financial deterioration that led Marelli to chapter 11 resulted from combined external shocks and structural vulnerabilities. CEO David Slump's first day declaration identified ongoing liquidity challenges, high fixed costs, and underperforming electric vehicle contracts as primary drivers of distress. The path to bankruptcy followed COVID-19 pandemic disruption, tariff exposure, declining OEM demand, and EV market volatility, with a capital structure carrying $4.9 billion in funded debt from the KKR roll-up.

COVID-19 pandemic disruption. The pandemic forced Marelli to suspend production at most of its global manufacturing plants during 2020. The drop in global car production reduced demand for Marelli's components, while the company's workforce was reduced by approximately 18,600 employees during the pandemic period. The company operated 58 manufacturing centers and 12 R&D facilities across 24 countries during a period of declining revenues.

Tariff exposure. The company's global manufacturing footprint and cross-border supply chain increased exposure to trade policy changes. In court filings, CEO Slump stated that Marelli was "severely affected by tariffs due to its import/export-focused business and the imposition of tariffs specifically against automotive manufacturers and suppliers." The company's operations spanned manufacturing facilities in the United States, Mexico, Europe, Asia, and elsewhere, with components crossing borders during production. Industry-wide, six leading U.S. automotive groups warned the Trump administration about the impacts of tariffs on the automotive supply chain.

Declining OEM demand. Marelli experienced declining demand from its two largest customers: Stellantis (the successor to Fiat Chrysler, which had sold Magneti Marelli to KKR) and Nissan (which had sold Calsonic Kansei to KKR). This concentration in former parent companies coincided with reduced production volumes and pricing pressure. The scale of the customer relationship is reflected in the bankruptcy schedules: Marelli owes Stellantis $454 million and Nissan $313 million in unsecured claims—a combined $767 million to the two automakers that were historical parents of Marelli's predecessor companies. Other major customers including Tesla, Mazda, and Bosch are also supplied by Marelli, but Stellantis and Nissan represent the largest customer relationships.

EV contract underperformance. CEO Slump cited underperforming EV contracts as a driver of distress. Industry-wide, EV sales growth fell from 109% in 2021 to 39% in 2023 to only 5% in 2024. The decreased interest in EVs triggered rapid volume reductions beginning in May 2024 as automakers with surplus EV inventory no longer had immediate need for components.

Working capital funding gap. The combination of these pressures—pandemic disruption, tariffs, OEM demand declines, and EV volatility—created a working capital funding gap that the company could not bridge through normal operations or refinancing. With approximately $4.9 billion in funded debt from the KKR acquisitions, Marelli faced debt service requirements as operating cash flows declined. The company's global scale required coordinated relief across multiple jurisdictions and stakeholder groups.

Industry Context: The Automotive Supplier Restructuring Wave

Marelli's bankruptcy is part of a broader wave of automotive supplier distress that has accelerated since 2023. The automotive supply chain has faced the capital-intensive transition to electric vehicles, tariff and trade policy uncertainty, OEM consolidation and volume declines, and the lingering financial effects of pandemic disruption.

In 2024, bankruptcy filings in the automotive sector rose by 33.5%, and the trend is expected to continue in 2025 due to rising interest rates, persistent inflation, and accumulated financial distress. The German automotive supplier sector has been affected. In the first half of 2024, 20 German automotive parts suppliers with revenues over 10 million euros filed for bankruptcy, a 60% increase from the prior period. German auto suppliers faced an anticipated 30% or more increase in bankruptcies in 2025. Between January and August 2024 alone, 36 German firms with more than $21.6 million in revenue went insolvent.

Other industry restructurings include Northvolt and Fisker. First Brands Group, another auto supplier, filed chapter 11 on September 29, 2024, with $11.6 billion in debt and estimated $219 million in added costs from tariffs. Other suppliers have announced workforce reductions: Bosch is cutting 22,000 jobs, while ZF Friedrichshafen expects to cut 14,000 positions by 2030.

EV sales growth decelerated, moving from 109% in 2021 to 39% in 2023 to 5% in 2024, and automakers reduced EV component orders as inventory levels rose.

Prearranged Restructuring Process

Marelli entered chapter 11 with a prearranged restructuring support agreement. The RSA—executed prior to filing with approximately 80% of the company's lenders—enabled the debtors to move quickly through first-day motions and secure DIP financing.

Capital Structure at Filing

The capital structure that Marelli brought into chapter 11 reflected both the scale of the KKR acquisitions and the accumulation of additional debt to address liquidity needs:

The emergency loan facility of $350 million had been provided prepetition to address immediate liquidity needs; under the RSA, this facility is to be repaid in full. The senior loan claims—the bulk of the approximately $4.9 billion in funded debt—are subject to restructuring through conversion to equity in the reorganized company.

DIP Financing Structure

The ad hoc group of senior lenders committed $1.1 billion in new-money priming DIP financing, with an additional 47.5% roll-up of senior loan claims upon entry of the Final DIP Order. The DIP facility provides:

• Super-priority administrative expense claim status
• First-priority liens on DIP collateral
• Milestones tied to plan confirmation timeline
• Roll-up of 47.5% of prepetition senior loan claims upon Final DIP Order entry

The court approved DIP access in three stages, allowing progressive access to liquidity while the case developed:

The staged approach allowed the debtors to access initial liquidity within one day of filing, with additional availability as the court considered the full DIP terms. First day motions were approved on June 12, 2025, enabling the company to continue paying wages and benefits to approximately 4,000 U.S. employees and to pay suppliers for goods and services provided during the chapter 11 process.

Overbid Process and Market Testing

The RSA included a market test provision allowing alternative bidders to submit superior proposals during a 45-day overbid period. The overbid process concluded on July 28, 2025, with the company confirming that it had received no superior proposals. The process invited rival bidders—including India's Motherson Group, a global automotive supplier—to submit improved terms. Final DIP approval proceeded on July 31, 2025. The DIP lenders' restructuring remains the controlling transaction, with emergence expected in 2026.

Plan Treatment and Exit Structure

The restructuring represents a complete change of control from KKR to the lender consortium. The DIP lenders will own 100% of the reorganized company, with secured debt eliminated entirely through conversion to equity. KKR, which invested approximately $11.5 billion to build Marelli through the Calsonic Kansei and Magneti Marelli acquisitions, will transfer its equity interests in exchange for a reduction in debt obligations.

Creditor Treatment by Class

The RSA establishes the following treatment framework:

The Japanese lender treatment provides an 11% cash payout on senior loan claims. General unsecured claims are to be paid in full, with secured creditors taking equity in lieu of full debt recovery.

Exit Ownership and Governance

Upon emergence, the DIP lenders will hold 100% of the equity in the reorganized company. The lender consortium—represented by the ad hoc group advised by Akin Gump Strauss Hauer & Feld LLP as legal counsel and Houlihan Lokey as financial advisor—will transition from creditors to owners. This change of control results from the debt-for-equity swap in the restructuring.

The restructuring eliminates secured debt entirely. CEO David Slump joined Marelli in January 2022 and led the restructuring process as CEO.

Business Continuity During Restructuring

Maintaining supply to OEM customers remained a focus during the restructuring.

The first day orders authorized continued payment of wages and benefits to the approximately 4,000 U.S. employees of the debtors. The company was also authorized to pay suppliers for goods and services provided during the chapter 11 process. Marelli continued to supply customers with components throughout the restructuring, including Stellantis, Nissan, Tesla, Mazda, and other OEM customers.

The prearranged nature of the restructuring, together with 80% lender support and $1.1 billion in new money, supported continued operations during the case.

Key Timeline

Professional Retentions

The debtor, creditor committee, and lender group each retained restructuring professionals.

Debtor Professionals

Committee Professionals

Lender Professionals

Greenberg Traurig served as Italian special counsel. Paul Hastings, FTI Consulting, and Pachulski Stang represented the committee.

Debtor Entities

The jointly administered cases encompass multiple global debtor entities filing in Delaware. The lead case is Marelli Automotive Lighting USA LLC (Case No. 25-11034). Notable affiliated debtors reflect the global scope of the enterprise:

• Marelli Corporation (Japan parent)
• Marelli Europe S.p.A.
• Marelli Mexicana, S.A. de C.V.
• Marelli Morocco LLC
• Marelli España S.A.
• Marelli Cluj Romania S.R.L.
• Marelli Cofap do Brasil Ltda
• Marelli Automotive Systems Europe PLC
• Marelli Yokohama Co., Ltd.
• Marelli Kyushu Corporation
• Marelli Aftermarket Poland Sp. z o.o.
• Marelli Automotive Lighting Juárez Mexico
• Marelli Automotive Lighting Tepotzotlán

The debtor entities span Japan, Europe, North America, South America, Africa, and other regions.

Frequently Asked Questions

When did Marelli file for bankruptcy?

Marelli Holdings Co., Ltd. filed for chapter 11 bankruptcy on June 11, 2025, in the U.S. Bankruptcy Court for the District of Delaware. The cases are jointly administered under Case No. 25-11034 before Judge Craig T. Goldblatt.

How much debt does Marelli have?

Marelli entered chapter 11 with approximately $4.9 billion in funded debt. The company listed more than $1 billion in assets and more than $1 billion in liabilities, with over 100,000 creditors globally.

What is the DIP financing arrangement?

Marelli secured $1.1 billion in new-money debtor-in-possession financing from an ad hoc group of senior lenders. The DIP includes a 47.5% roll-up of senior loan claims upon entry of the Final DIP Order, which the court approved on July 31, 2025, after staged interim approvals of $519 million and an additional $130 million.

Who will own Marelli after restructuring?

The DIP lenders will own 100% of the reorganized company. KKR, the current private equity owner that invested approximately $11.5 billion to create Marelli through the Calsonic Kansei and Magneti Marelli acquisitions, will transfer its equity in exchange for debt reduction.

What caused Marelli's financial distress?

Multiple factors drove the filing: COVID-19 pandemic disruptions that forced production shutdowns and workforce reductions; tariff exposure from the company's import/export-focused global supply chain; declining demand from major customers Stellantis and Nissan; underperforming electric vehicle contracts amid EV adoption volatility; and high fixed costs from operating 58 manufacturing centers globally.

How much does Marelli owe its major customers?

Marelli owes Stellantis $454 million and Nissan $313 million in unsecured claims—a combined $767 million to its two largest customers. Both automakers are former parent companies of Marelli's predecessor entities (Stellantis via Magneti Marelli; Nissan via Calsonic Kansei).

Will general unsecured creditors be paid?

Yes. Under the restructuring support agreement terms, general unsecured claims are to be paid in full, with secured creditors taking equity in lieu of full debt recovery.

What happens to employees during restructuring?

First day orders authorized continued payment of wages and benefits to approximately 4,000 U.S. employees. The company's global workforce of over 46,000 continues operations during the restructuring, and Marelli has continued supplying OEM customers during the chapter 11 process.

When is Marelli expected to emerge from bankruptcy?

Marelli expects to emerge from chapter 11 in 2026 under the ownership of its principal lenders. The 45-day overbid process concluded on July 28, 2025, with no superior proposals received, allowing the case to proceed toward plan confirmation.

What is Marelli's corporate history?

Marelli was formed from KKR's acquisition of Calsonic Kansei from Nissan for $4.5 billion (announced November 2016, closed March 2017), followed by the $7.2 billion acquisition of Magneti Marelli from Fiat Chrysler Automobiles (announced October 2018, closed May 2019). The combined company operates 58 manufacturing centers and 12 R&D facilities across 24 countries, supplying lighting, powertrain, electronics, and interior systems to global automakers.

Who is the claims agent for Marelli?

Kurtzman Carson Consultants LLC serves as the claims and noticing agent. The firm maintains the official claims register and distributes case notifications to creditors and parties in interest.

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