The parent company of the major automotive care chain NAPA, Genuine Parts, announced on Tuesday its plan to separate its automotive parts business from its industrial parts business, creating two independent publicly traded companies.
The separation is the final outcome of a lengthy evaluation conducted by the Atlanta-based company alongside its financial advisors. Earlier on Tuesday, The Wall Street Journal reported that an announcement regarding the spin-off was imminent.
Genuine Parts stated that the split is intended to allow both business units to better execute their strategies and achieve growth within their respective markets. It will also provide greater flexibility for each business to pursue large-scale investments and accelerate development.
Recently, investors have widely supported corporate spin-offs across various industries as a way to create more focused business entities. Faster-growing divisions within large corporations are often held back by other segments or constrained by conflicting strategic directions among different units.
Genuine Parts, which currently has a market capitalization exceeding $20 billion, was founded in 1928 and is a significant player in the automotive and industrial parts sectors, operating approximately 10,800 locations across 17 countries.
The company's automotive business represents one of the world's largest automotive parts and vehicle maintenance and repair networks, with brands including NAPA.
Its industrial business operates under the Motion brand, supplying millions of parts to various industries to keep industrial machinery running.
In 2025, the automotive parts business generated sales exceeding $15 billion, while the industrial parts business reported revenue of approximately $9 billion.
As of last Friday, Genuine Parts' stock had risen about 20% year-to-date. Investors believe favorable factors such as aging automotive and machinery fleets will drive demand for replacement parts and maintenance services. Additionally, policies under the Trump administration promoting reinvestment in U.S. infrastructure are expected to benefit the industrial sector.
Alongside the spin-off announcement, Genuine Parts reported quarterly results that fell short of expectations, causing its stock to decline in Tuesday's premarket trading. Both revenue and profit for the fourth quarter missed analyst forecasts.
Since assuming the role of CEO in June 2024, Will Stengel has focused on improving profitability. On Tuesday, he stated that the company would concentrate on factors within its control amid a "changing environment."
Last fall, following a cooperation agreement with activist investment firm Elliott Investment Management, Genuine Parts added new directors to its board. Elliott, which described itself as one of the largest shareholders of Genuine Parts at the time, expressed the view that the company's stock price did not fully reflect the value of its two main businesses.
J.P. Morgan is serving as the lead financial advisor for the spin-off transaction, with Guggenheim Securities also acting as a financial advisor.
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