PINF Pininfarina Spa

   (FROM THE WALL STREET JOURNAL 12/15/15) 
   By John D. Stoll and Eric Sylvers 

Mahindra Group, an Indian conglomerate that makes airplanes, cars and tractors, purchased control of troubled Italian auto-design specialist Pininfarina SpA in a deal that could boost its automotive credentials.

Mahindra's 25.5 million euros ($28.1 million) deal to buy 76% of the 85-year-old design firm is a modest investment by auto-industry standards but strategically important for a company already owning an array of auto assets. Known most for a historical relationship with Ferrari NV, Pininfarina's designs have long been copied by others.

Auto companies have been aggressively snapping up smaller firms in hopes of better competing in an industry that is demanding more capital and better engineering resources due to the combination of tougher regulations and the entrance of new players, such as Google Inc. While much of recent deals activity has involved parts and retail businesses, auto makers have been getting more active.

Three German car makers recently paid $3.1 billion for Nokia Corp.'s digital mapping business. Ford Motor Co. and General Motors Co. have said they are weighing acquisitions.

In addition to Mahindra & Mahindra Ltd.'s sport-utility vehicle brand sold primarily in India, Mahindra owns South Korea's Ssangyong Motor Co. and the Reva Electric Car Co.

"This clearly brings in a huge integrated approach we can go down into market with," said CP Gurnani, chief executive of Tech Mahindra, an information technology consulting firm under the Mahindra umbrella. Tech Mahindra will hold 60% of the Pininfarina stake, while the Mahindra & Mahindra auto-making arm will own the remaining 40%. In addition to buying control from the Pincar holding company, Mahindra will buy additional shares on the open market, inject capital and assume debt obligations.

About three-quarters of Pininfarina's business is in the auto industry, but it also has clients in other industries. In an interview, Pininfarina Chief Executive Silvio Angori said the firm and Mahindra will collaborate more on aerospace projects, for instance.

Pininfarina's main business of designing vehicles for major car companies, including Fiat Chrysler Automobiles NV, Hyundai Motor Co. and Ford, fell into distress starting nearly a decade ago.

Sales of more than 1 billion euros ($1.1 billion) in 2007 fell to under 100 million last year.

The family said it would continue to own 1.2% of the company following the closing of the deal.

(END) Dow Jones Newswires

December 15, 2015 02:47 ET (07:47 GMT)

Pininfarina (BIT:PINF)
Historical Stock Chart
From Oct 2024 to Nov 2024

Pininfarina (BIT:PINF)
Historical Stock Chart
From Nov 2023 to Nov 2024