Mahindras to Buy Pininfarina

Tech Mahindra and parent Mahindra & Mahindra have agreed to acquire Pininfarina SpA, paying $185 million (Rs.1,240 crore) for the Italian car styling company known for its designs for iconic brands such as Ferrari, Maserati, Rolls-Royce and Cadillac.
The Indian companies are expected to complete the acquisition of a 76.06% stake in Pininfarina from its current controlling shareholder, Pincar S.r.l., by June. The three-step deal includes an open offer to the Italian company's minority shareholders and a rights issue later in the year to infuse funds in it.
“Pininfarina will add enormous value to Tech Mahindra's portfolio of engineering services. The legendary high-end design credentials of Pininfarina will significantly enhance the design capabilities of the entire Mahindra Group,“ Mahindra Group Chairman Anand Mahindra said in a news release.
Founded 85 years ago by Battista `Pinin' Farina, Pininfarina has designed almost 1,000 cars across brands over the years. In recent years, it ventured into the design of planes, boats and wind tunnels for car tests. The company had been unprofitable for 10 of the past 11 years and had net debt of $57 million at the end of June.
This is the latest of the Mahindra group's global acquisitions in the automotive space. It has in the past bought South Korean automaker Ssangyong and the motorcycle unit of France-based PSA Peugeot Citroen. It has an aerospace unit in Australia. The investment will be done via a joint venture company , in which IT services company Tech Mahindra will hold a 60% stake and its parent, automaker M&M, the rest. The companies will also make an open offer for all the remaining ordinary shares of Pininfarina. A rights issue to infuse funds into the design and styling company will be executed before the end of 2016, the Mahindra Group said in a statement.
Pininfarina will remain an independent company , listed on the Milan Stock Exchange, with Paolo Pininfarina, the founder's grandson, continuing as its chairman. Pininfarina shares were suspended for trading on Monday in Italy .

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