Indian group Mahindra takes over Pininfarina

Today’s announcement sees Mahindra, and Tech Mahindra, sign an agreement with Pincar for a 76.06 per cent stake in the Pininfarina business, reportedly worth $255 million.

Pininfarina, which has designed cars for Ferrari, Maserati, and Rolls-Royce, is the latest Italian industrial brand to be snapped up by an Asian buyer.

The SPV will also make an open offer to acquire an additional 23.94 per cent at €1.1 a share from shareholders of Pininfarina, said the press statement of the company.

Mahindra first approached Pininfarina at the beginning of this year, but has links with its target going back to 2013, when the Indian company hired Hubert Tassin, a former Pininfarina designer. Those tracking the deal were surprised that the acquisition is being made through Tech Mahindra, rather than parent Mahindra & Mahindra, which makes SUVs, tractors and other vehicles. Now it will join forces with Tech Mahindra’s product conceptualisation, design and styling operations in Europe, the US, Asia and around the world.

Italy’s Pininfarina has high-end design credentials which will significantly enhance the design capabilities of the entire the Mahindra group.

Mahindra group has been active on the acquisition front. Its Tech Mahindra networking and engineering division and Mahindra & Mahindra vehicle wing have teamed up to buy the fabled Italian agency. The Indian company will offer the same price for the remaining stock, which closed Friday nearly four times higher at 4.20 euros. M&M’s shares gained 2% to close at Rs 1,287 on the BSE on Monday while Tech Mahindra ended 1.3% up at Rs 543.

Pininfarina’s economic problems are not new at all, as it kept struggling with debt and was not profitable for 10 of the past 11 years. “Tech Mahindra’s global presence and global delivery model will allow us to compete for a larger pie of the business”.

With automobile makers nurturing in-house talent for automotive design, design houses like Pininfarina aren’t in the pink of their health anymore. “Adding Pininfarina’s design skills to our integrated engineering solutions enables a strong entry into automotive styling, design & development and reinforces our body engineering capabilities”, Anand Mahindra, chairman of Mahindra Group, said.

Pininfarina S.p.A.is an independent Italian auto design company, founded and run by the Pininfarina family since 1930.