Mahindra to acquire design icon

Mahindra to acquire design icon

Indian industrial giant, and vehicle manufacturer, Mahindra is set to acquire Italian design-house Pininfarina.

Mahindra already has interests ranging from tractors to IT outsourcing, manufacturers cars under its own name, and already owns Korean-brand Ssangyong and a majority stake in Peugeot scooters.

Pininfarina has designed cars for Ferrari, Maserati, and Rolls-Royce as well as numerous mainstream brands, as well as contract manufacturing.

The all-cash deal for Pininfarina sees the company sold for just a quarter of what it was listed at last Friday – a deal worth just $25.3 million Euros for the first 75% of the company. It will then make an offer to buy the remaining shares for the same price.

Mahindra will inject $20 million Euros into the company and provide more than $120 million in guarantees to creditors.

“You have to bear in mind that under this deal the company will be recapitalised and will have better growth opportunities,” Pininfarina chief executive Silvio Angori told reporters.

The Italian company has been loss-making for years as car companies chose to design in-house rather than contract out.

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.

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