Fiat Chrysler Automobiles have decided to sell its high-tech car-part unit, Magneti Marelli to Calsonic Kansei through a $7.1 billion deal.

According to a statement that was issued by FCA, the new company will be now named as Magneti Marelli CK Holdings. The Italian company specialises in lighting, powertrain as well as high-tech electronics.

Reports suggest that FCA is all set to sign a multiyear supply agreement with Marelli in order to maintain its presence in Italy and maintain employment levels. Reports citing internal sources of the company stated that FCA will be retaining Marelli’s plastic division which generated close to 700 million euros in revenue in 2017.

Experts suggest that the new agreement will allow the new establishment under Calsonic Kansei to cut costs and expand its customer base. Beda Bolzenius, the CEO of the Saitama based company will lead the new entity which will now be based out of Japan.

“The transaction recognizes the full strategic value of Magneti Marelli and is another important step in our relentless focus on value creation,” FCA CEO, Mike Manley said.

The sale is one of the first major transaction that the company has undergone since Mike Manley took over as the CEO of the company after the unprecedented death of Sergio Marchionne in July.

“This is a transformational day for both Magneti Marelli and Calsonic Kansei, creating as it does a global business of exceptional range, reach, expertise and future prospects. This is a moment of great opportunity for all our people to be part of a secure, growing and independent company of considerable scale that can look to the future with energy, ambition and confidence.” Said CEO of Magneti Marelli, Ermanno Ferrari.