Mahindra agrees to buy Pininfarina image

After months of speculations, the purchase negotiations of Italian car designer Pininfarina by Mahindra & Mahindra have been almost concluded. The Indian company will buy 76 percent from the car designer.

Some reports emerged last month suggested that the purchase agreement between Mahindra & Mahindra, India’s largest maker of sport utility vehicles, and the Italian car designer Pininfarina are in the final stage. Those rumours proved to be true, as the two parts reached to an agreement on Monday. Mahindra, together with its IT outsourcing division Tech Mahindra Ltd, will buy 76.06 percent of Turin-based Pininfarina from holding company Pincar at 1.1 euros per share for 25.3 million euros (28 million dollars). It will then make an open offer for the remaining 23.94 percent at the same price. “You have to bear in mind that under this deal the company will be recapitalised and will have better growth opportunities,” Pininfarina CEO Silvio Angori told reporters.

Mahindra will also inject 20 million euros into the designer through a rights issue of new stock, and will provide a guarantee worth up to 114.5 million euros to its lenders, creditors and lessors, the company said. The deal is expected to close in the first half of 2016. The design company has been unprofitable for 10 of the past 11 years while struggling with debt. Pininfarina already works with Mahindra, but the Indian automaker wants to expand the collaboration even further, after its taking over of South Korean carmaker Ssangyong and the scooter unit of French auto manufacturer PSA Peugeot Citroen.

Via Reuters