Mahindra close to purchase of Pininfarina

13 Dec 2015 | By Shiladitya

According to sources, Mahindra & Mahindra is close to buying iconic Italian car designer brand Pininfarina.

After months of talks, terms of the deal have been agreed by both sides and an announcement could come by next week.

"It's just a matter of putting a stamp on a contract," one of the sources said.

Comments could not be obtained from either Pininfarina or Mahindra.

In context: Mahindra close to sealing Pinninfarina deal

Pininfarina A brief background of Pininfarina

Founded by Battista "Pinin" Farina in 1930, theTurin-based Pininfarina is iconic in the automotive industry for designing cars of brands like Ferrari, Maserati, Rolls Royce and Cadillac.

The Milan-listed company also designs building interiors, electronics and furniture among other things.

Yet, Pininfarina were struggling to stay afloat as car firms moved to hiring in-house stylists rather than independent design firms.

Some of the most iconic Pininfarina designs

Some of the most iconic Pininfarina designs include the 1960 Peugot 404, 1966 Alfa Romeo Spider, 1968 Ferrari Daytona, 1984 Ferrari Testarossa, 1987 Ferrari F40, 1987 Cadillac Allante, 2003 Ferrari Enzo, 2006 Ferrari P4/5, and the 2008 Maserati GranTurismo,
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13 Dec 2015Mahindra close to purchase of Pininfarina

Mahindra's 3rd acquisition

According to analysts, Mahindra has a reputation for buying distressed and undervalued companies. Last year it acquired a majority stake in Peugot's loss-making scooter business, and acquired troubled South Korean car maker Ssangyong Motor in 2010.
What we know about the deal?

Deal What we know about the deal?

Mahindra's interest in Pininfarina goes back to 2013 when Mahindra hired an ex-Pininfarina designer, Hubert Tassin.

Pininfarina had a debt of €44.7 million at the end of September 2015, and has been unprofitable for 10 of the past 11 years.

As part of the deal, Mahindra is set to inject €150 million in Pininfarina to clear the debt and provide fresh capital.

Asian companies and Italian brands

If Mahindra and Pininfarina conclude the deal, Pininfarina will become the second major Italian industrial brand to be purchased by an Asian buyer. China National Chemical Corp acquired Italian tyre-maker Pirelli in March for a €7.3 billion deal.
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15 Dec 2015Tech Mahindra, M&M to buy Pininfarina

In a historic deal, Tech Mahindra is all set to acquire a controlling stake in Pininfarina, the iconic Italian automotive design firm.

76.06% shares of Pininfarina will be bought by Tech Mahindra and its parent Mahindra & Mahindra from the current controlling shareholder Pincar.

Each share is valued at €1.1 (Rs.81.4) per share or approximately €25 million (Rs.184 crore).

15 Dec 2015What Mahindra stands to gain from the deal?

Anand Mahindra, chairman of Mahindra Group said that the deal would add a great value to Tech Mahindra's engineering services portfolio.

Moreover, Mahindra group hopes "that the legendary high-end design credentials of Pininfarina will significantly enhance the design capabilities of the entire Mahindra group".

Other than cars, Pininfarina also designs buildings, interiors and electronics and the Mahindra group is hoping to use this expertise.