Genuine Parts Co. is still on track to break itself in two — industrial and automotive — and for the distributor’s B2B customers, that means a countdown clock is now running.
The split has been in the works for most of this year. In its Q2 earnings report, the Atlanta-based parent of NAPA Auto Parts and industrial distributor Motion reaffirmed it will split its automotive and industrial businesses into two separate public companies by the first quarter of 2027, even as it trimmed its full-year GAAP earnings outlook to absorb the costs of getting there.
The company posted total sales of $6.5 billion for the quarter, up 6% from a year earlier.
Genuine Parts is No. 388 in the Top 1000 Database. The market research tool ranks North America’s largest online retailers by their annual ecommerce sales.
Chairman and CEO Will Stengel said the standalone audit work for the split is complete and the company expects to confidentially file a Form 10 with the U.S. Securities and Exchange Commission later this summer. GPC also plans to hold separate investor days for both future companies in early December in New York, where it will detail each business’s strategy, financial profile and capital structure.
Addressing recent rumors about a possible deal involving the automotive business and a competitor, Stengel said the company is “not currently in discussions with any competitor” and remains focused on standing up two independent public companies.
Meanwhile, chief financial officer Bert Nappier offered new detail on how the costs of the split will fall on each side. Of roughly $360 million in 2025 corporate costs, $210 million to $230 million — including about $20 million tied to asbestos litigation — will be allocated to the automotive business.
The companies expect the automotive business to absorb roughly $250 million in total added costs once dis-synergies are included. The industrial business, Motion, is getting a lighter load. That is, $50 million to $75 million in allocated corporate costs and about $100 million in total added costs.
An additional $50 million in financing fees tied to GPC’s accounts receivable program is still under review.
Timing of the separation
For B2B buyers, the more immediate story may be timing.
The industrial segment that the company is spinning off is currently the stronger performer. Motion’s sales rose 7% for the quarter, with EBITDA margin improving 30 basis points to 13.1%.
The company said it saw growth in 11 of the 14 industrial end markets it tracks. Additionally, it saw six consecutive months of manufacturing PMI readings above 50 — a threshold that signals expansion.
Lance Owide, vice president of B2B at Commerce, told Digital Commerce 360 that the execution of the split is the tricky part. Commerce is the Austin-based parent company of BigCommerce, Feedonomics and Makeswift.
“Shared ERP, logistics, procurement, and credit operations all have to be untangled, and Q1 2027 is an aggressive clock for that,” Owide said.
Owide said for industrial customers, continuity is the whole product.
“Contract pricing, rebates, credit terms, and system integrations — punchout, EDI, APIs — all have to be re-papered or re-platformed,” Owide said. “If these aren’t done correctly, it could be death by 1000 cuts for customers.
He noted that competitors Grainger and Fastenal will treat the transition as open season.
But Owide said the upside is a more focused, more digital supplier.
“A standalone Global Industrial can invest its own capital in what B2B buyers now expect: digital self-service, real-time inventory visibility and AI-driven procurement, instead of competing for capex with an automotive retail network,” Owide said.
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