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Mahindra agrees to purchase of Ferrari-designer Pininfarina
[MUMBAI] Mahindra & Mahindra Ltd agreed to buy Italian car designer Pininfarina SpA in a deal worth about 168 million euros (S$260 million), underscoring the Indian vehicle maker's international ambitions.
Mahindra, together with affiliate Tech Mahindra Ltd., will buy a 76 per cent stake from the Pincar holding company for 25.3 million euros, or the equivalent of 1.10 euros a share, the Mumbai-based company said Monday in a statement. The Indian company will offer the same price for the remaining stock, which closed Friday almost four times higher at 4.20 euros.
"The legendary high-end design credentials of Pininfarina will significantly enhance the design capabilities of the entire Mahindra group," Chairman Anand Mahindra said in the statement. "Given the increasing design sensibilities of today's consumers, product design will greatly influence customer choice."
The takeover of Pininfarina, the creator of the Ferrari 458 Spider roadster, marks the latest international expansion by Mahindra following its acquisitions of South Korean carmaker Ssangyong and the motorcycle unit of French auto manufacturer PSA Peugeot Citroen. The designer already cooperates with Mumbai-based Mahindra on SUV development and worked with it on the Halo electric sports-car concept unveiled last year.
In addition to buying stock, Mahindra will invest 20 million euros in Pininfarina and provide a guarantee to creditors of 114.5 million euros.
Pininfarina, which has been unprofitable for 10 of the past 11 years while struggling with debt, shut a floundering division that built cars for other manufacturers three years ago. Following the Mahindra deal, it will remain an independent company with a separate listing in Milan, according to the statement. Paolo Pininfarina, a grandson of the company's founder, is also set to remain chairman. The deal is expected to close in the first half of 2016. Mahindra was advised by Rothschild & Co.