Castiglioni Talks MV, H-D

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Earlier this month Harley-Davidson, Inc. announced it had signed an agreement to purchase Italian motorcycle manufacturer MV Agusta Group for €70 million ($109 million).

The purchase price includes payment of €45 million ($70 million) in existing bank debt and a contingent payment to Claudio Castiglioni in 2016, if certain financial targets are met. MV Agusta Group is privately held, with the Castiglioni family owning 95 percent of shares and Italy's Banca Intesa holding the remainder.

MV Agusta retails product through about 500 dealers worldwide. The OEM supplies only 40-some dealers stateside. In 2007, MV shipped 5,819 motorcycles.

Maverick Greissing, editor of Italy's Moto Dealer News, obtained an exclusive interview with Castiglioni the day after news of the H-D take-over agreement was announced.

MDN: During an interview four weeks ago you denied you were in negotiations with H-D and instead made reference to an Indian group. Was there some pact of confidentiality during negotiations with H-D?

CASTIGLIONI: I'll say this: We were in contact with the Indians, but also with other holding companies.

MDN: The banks have rendered the operation possibile?

CASTIGLIONI: Contrary to what some may think, I have always had optimal relationships with the banks, and in particular with Banca Intesa, which has offered a remarkable contribution — not only of monetary character but also during these negotiations.

MDN: But you still have to get an OK from the suppliers, giving them a chance to extract their credits?

CASTIGLIONI: No, the suppliers will not have to accept the deal.

MDN: The production lines haven?t rolled in months. When will you resume normal production?

CASTIGLIONI: It is not true that the production lines haven't been rolling. Have you gone to see? Because I?ve been there.

MDN: What do you tell Italian dealers who've believed steadfast in MV Agusta all these years?

CASTIGLIONI: Our suppliers and dealers should be satisfied because this deal represents an opportunity for a future we've all been striving for — a continued dedication. This is one of the most important motorcycle couplings of the last 30 years. These are two brands that have grown to prestige, albeit each in their own way.

MDN: How would the MV dealer network be set up under H-D?

CASTIGLIONI: It's difficult to respond to that because we really haven't talked about such topics.

MDN: This deal appears to open the door for MV Agusta in the U.S., the most important market in the world for premium product. Will distribution in the U.S. remain with Eraldo Ferracci and Cagiva USA, or will it be operated by Harley-Davidson?

CASTIGLIONI: This deal will open the doors very wide for our U.S. market, which is a thing of great, great importance. However, distribution is an organizational task Harley-Daividson will have to cure.

MDN: Is there a future for the Cagiva brand?

CASTIGLIONI: There'll be development for the Cagiva brand. Right now everyone is dedicated to and thinking about MV Agusta before Cagiva.

MDN: Is MV Agusta working on a triple?

CASTIGLIONI: It's true. We won't show it at EICMA this year, but we?ll reveal it when it's ready.

MDN: Speculation is that MV Agusta wants to return to racing. In SuperBike or MotoGP?

CASTIGLIONI: It's something I'm interested in and would like to pursue. Still, we must be dedicated to the product first; then racing will follow.