After months of speculations, Mahindra has finally confirmed the purchase of a majority stake in Italian design brand Pininfarina.
Two Mahindra companies, Tech Mahindra and automotive arm Mahindra and Mahindra, will jointly buy 76.06 % of Pininfarina shares from the current controlling shareholder Pincar S.r.l. at a price of Euro 1.1 per share. A joint venture will be formed for the purpose, the ownership of which will be shared in a 60:40 ratio between Tech Mahindra and M&M.
The remaining ordinary shares of Pininfarina will be sold through an open offer, with a rights issue touted for 2016 to infuse funds into the company.
Mr Paolo Pininfarina will continue as the chairman of the Board.
With the acquisition, Tech Mahindra will gain access to relationships Pininfarina has forged during its 85-year history, including Ferrari, Alfa Romeo, Maserati and Peugeot. Pininfarina, on the other hand, will be able to leverage Tech Mahindra's presence across 90 countries and access to about 780 clients.
The two firms aim to cross-sell and up-sell their services to existing clients and help attract new ones over the coming years.
Mr. Anand Mahindra, Chairman of the Mahindra Group, commenting on Pininfarina joining the Mahindra family, said, "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. Given the increasing design sensibilities of today’s consumers, product design will greatly influence customer choice and experience, and hence our success”.
Paolo Pininfarina, Chairman Pininfarina S.p.A. added, "In a globalized world, entrepreneurship and capital do not need a passport. We are joining hands with a $ 3.9 Billion Technology & Global partner, and part of the $ 16.9 billion global Mahindra Group, which will not only strengthen our Italian identity but will open more doors. Tech Mahindra's global presence and global delivery model will allow us to compete for a larger pie of the business."
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