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Mahindra and Mahindra, Tech M to buy Italian designer Pininfarina

Tech Mahindra, the software services arm of conglomerate Mahindra & Mahindra, has entered into an agreement with Pincar SrL to acquire a controlling stake in iconic Italian automotive design firm Pininfarina, which has designed cars for Ferrari, Maserati, Rolls-Royce and Cadillac

business Updated: Dec 15, 2015 02:17 IST
HT Correspondent
HT Correspondent
Hindustan Times
Mahindra and Mahindra,Tech M,Italian designer Pininfarina
CP Gurnani, CEO and MD, Tech Mahindra (right) with Paolo Pininfarina, chairman Pininfarina SpA. Tech Mahindra and parent Mahindra & Mahindra will purchase 76.06% shares of Pininfarina from the current controlling shareholder Pincar.(Handout Photo)

Tech Mahindra, the software services arm of conglomerate Mahindra & Mahindra, has entered into an agreement with Pincar SrL to acquire a controlling stake in iconic Italian automotive design firm Pininfarina, which has designed cars for Ferrari, Maserati, Rolls-Royce and Cadillac.

As a part of the deal, Tech Mahindra and parent Mahindra & Mahindra will purchase 76.06% shares of Pininfarina from the current controlling shareholder Pincar for €1.1 (Rs 81.4) per share or about €25 million (Rs 184 crore). This investment will done via a joint venture company, which will be 60% owned by Tech Mahindra and 40% by M&M, Tech Mahindra said in a statement on Monday.

This will be followed by an open offer for all the remaining ordinary shares of Pininfarina at the same price (€1.1/share). A rights issue to infuse funds into the design house will also be executed before the end of 2016, Tech Mahindra said. Mahindra will also reportedly provide a guarantee to creditors of €114.5 million.

Pininfarina has made losses for years and has debt of around €50 million.

“Pininfarina will add enormous value to Tech Mahindra’s portfolio of engineering services. But just as important is the fact that the legendary high-end design credentials of Pininfarina will significantly enhance the design capabilities of the entire Mahindra group,” said Anand Mahindra, chairman of Mahindra Group.

Apart from cars, Milan-listed Pininfarina also designs buildings, interiors and electronics.

“Adding Pininfarina’s design skills to our integrated engineering solutions enables a strong entry into automotive styling, design and development and reinforces our body engineering capabilities,” said CP Gurnani, CEO and MD of Tech Mahindra.

Pininfarina’s 25-year design expertise in industries beyond automotive will give Tech Mahindra “winning edge” in areas such as aerospace, consumer electronics, architecture and transportation, where it already has a strong footprint, added Gurnani.

Mahindra and Pininfarina have already worked together in the past on the Halo electric sports car concept, which M&M had showcased at the Delhi auto expo in 2014.

M&M has been known to acquire iconic but distressed, undervalued companies. In 2010, it acquired South Korea’s ailing sports utility vehicle maker Ssangyong for about $463 million at that time. In 2014, it acquired a 51% stake in Peugeot Motorcycles, part of France-based PSA Group.

First Published: Dec 15, 2015 00:00 IST