Genuine Parts Draws O’Reilly Cash Bid for Auto Unit Napa

Genuine Parts Co. has attracted a cash bid from O’Reilly Automotive for its auto parts arm, valued at $10 billion or more, as it seeks to refocus on its industrials business. The unit, which includes the Napa aftermarket auto parts brand, generated over $15 billion in sales last year and has more than 10,000 global locations. A potential sale could be announced by the end of summer, although Genuine Parts could still decide to keep the unit or pursue a spinoff. The move comes as Genuine Parts works to separate its auto parts business and become a pure-play industrials company, with a focus on its Motion brand, which specializes in industrial maintenance and repair services. O’Reilly Automotive, a U.S. specialty retailer of car parts and accessories, would make this its largest deal since 2008 if the acquisition goes through. Genuine Parts announced in February that it was working with advisers JPMorgan Chase & Co. and Guggenheim Securities to separate its auto parts business, following a cooperation agreement with activist investor Elliott Investment Management. The company’s CEO, Will Stengel, stated that splitting the businesses would “sharpen customer and market alignment, increase clarity and speed, simplify operations and enable disciplined, business-specific investments to unlock long-term value”. If the sale is completed, Genuine Parts would be left with its global industrial business, which had revenue of about $9 billion last year.