GPC Stock Pops 13%, ORLY Falls 5% — O’Reilly Makes Cash Bid For Genuine Parts’ $10B Auto Unit, Says Report

A deal could be announced by late summer, though Genuine Parts may also consider retaining the business or pursuing a spinoff.

• O’Reilly Automotive has reportedly made a cash offer for Genuine Parts’ auto parts division, with other bidders potentially still in play.
• O’Reilly would be pursuing its largest acquisition since 2008 if the deal goes through.
• Genuine Parts began exploring a separation of its auto parts business earlier this year.

Shares of Genuine Parts Co. (GPC) jumped about 13%, while O’Reilly Automotive (ORLY) fell around 5%. The moves came after a report said Genuine has attracted a cash bid from O’Reilly for its auto parts unit as it looks to refocus on its industrials business.

Reported Bid And Valuation Details

Genuine Parts, based in Atlanta, has attracted a cash bid from O’Reilly Automotive for its auto-parts arm, according to Bloomberg, citing people familiar with the matter.  The report said the unit could be valued at $10 billion or more, with a potential deal possibly announced by the end of the summer. Genuine Parts, though, could still decide to retain the businzess or pursue a spinoff without O’Reilly.

Deal Significance For ORLY

O’Reilly Automotive, based in Springfield, Missouri, is a U.S. specialty retailer of car parts and accessories. A purchase would mark its largest deal since 2008 when it acquired CSK Auto Corp. for about $1 billion, according to Bloomberg.

The interest comes as investors favor simpler portfolios amid a volatile automotive industry facing high costs, economic uncertainty, and affordability challenges for consumers.

GPC Separation Plan Already Underway

Best known for its Napa brand, Genuine Parts announced in February that it was working with advisers JPMorgan Chase & Co. and Guggenheim Securities to separate its auto parts business and become a pure-play industrials company, according to the Bloomberg report. Chief Executive Officer Will Stengel said at the time that splitting the businesses “sharpens customer and market alignment, increases clarity and speed, simplifies operations and enables disciplined, business-specific investments to unlock long-term value.”

GPC, ORLY Stocks: What Stocktwits Retail Sentiment Says

On Stocktwits, retail sentiment for both GPC and ORLY improved to ‘neutral’ from ‘bearish’ in the past 24 hours, while message volume was ‘high.’

Year-to-date, while the GPC stock has gained nearly 6%, ORLY shares have slipped about 3% in the same period.

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