Harley-Davidson, Inc. has signed a definitive agreement to purchase Italian motorcycle manufacturer MV Agusta Group (MVAG) for €70 million ($109 million).
Harley-Davidson, Inc. CEO Jim Ziemer says the acquisition is intended primarily to expand Harley-Davidson, Inc.'s presence and footprint in Europe, complementing the Harley-Davidson and Buell motorcycle families.
"Motorcycles are the heart, soul and passion of Harley-Davidson, Buell and MV Agusta," Ziemer says. "Both have great products and close connections with incredibly devoted customers."
MV Agusta has significantly slowed production in 2008 due to financial difficulties. The purchase price includes payment of €45 million ($70 million) in existing bank debt. The agreement also provides for 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 MVAG shares.
MV Agusta retails product through about 500 dealers worldwide, the vast majority of them in Europe. In 2007, MVAG shipped 5,819 motorcycles. H-D says it is striving to grow through expansion into foreign markets. In Europe, retail sales of Harley-Davidson motorcycles have grown at a double-digit rate in each of the last three years.
H-D plans to continue to operate MV Agusta Group from its headquarters based in Varese, Italy. The Motor Company says the first priority will be to appoint a leadership team to include a new managing director and to resume the manufacture of current models. MV Agusta Group chairman Claudio Castiglioni will continue in a leadership role as chairman and will play a major role in future product development. Design chief Massimo Tamburini will continue his leadership of MV Agusta Group's design studio.
The acquisition is expected to close in several weeks, pending the satisfaction of contingencies and receipt of regulatory approvals. Harley-Davidson intends to fund the transaction primarily through euro-denominated debt.