O'Reilly Automotive has reportedly made a cash bid for Genuine Parts Co.'s auto parts arm, NAPA Auto Parts, with the unit potentially valued at $10 billion or more. This move comes as Genuine Parts endeavors to pivot its focus towards becoming a pure-play industrials company, a decision influenced by activist investor Elliott Investment Management.
The auto parts unit, best known for its NAPA brand, operates over 10,000 global locations and generated more than $15 billion in sales last year. In contrast, O'Reilly Automotive, a specialty retailer of car parts, has a market value of around $77 billion and operates approximately 6,000 stores in the U.S. If successful, this acquisition would mark O'Reilly's largest deal since its $1 billion purchase of CSK Auto Corp. in 2008.
Genuine Parts had announced in February its collaboration with advisers JPMorgan Chase & Co. and Guggenheim Securities to separate its automotive business. Following the separation, the company would concentrate on its global industrial business, operating under the Motion brand, which specializes in industrial maintenance and repair services and generated about $9 billion in revenue last year. While a potential sale could be announced by the end of the summer, Genuine Parts still retains the option to keep the unit, pursue a spin-off, or consider other bidders.
