Mahindra & Mahindra Ltd, India’s largest maker of sport-utility vehicles, is in the final stages of negotiations to buy Italian auto-design firm Pininfarina SpA, according to people familiar with the matter
Mahindra may reach an agreement to purchase the company that has designed some of the most iconic Ferrari sports cars as early as next week, said the people, who asked not to be identified because discussions are private. Representatives for Mahindra and Pininfarina declined to comment.
While other potential bidders have expressed interest in buying the Turinbased creator of the Ferrari California T roadster, Mahindra is favoured by the Pininfarina family and its creditor banks because it is seen as providing stability through its position in the auto industry, the people said.
Negotiations are continuing and could still fall apart, the people said. The Italian company was founded in 1930 and has designed automotive Clasiq such as the Ferrari 250 GT and Alfa Romeo Giulietta Spider from the 1950s.
Pininfarina has been unprofitable for 10 of the past 11 years while struggling with debt and a floundering division that built cars for other manufacturers, a business it shut three years ago. It would be the latest Italian company to be purchased by a foreign buyer .
Pininfarina’s controlling shareholder, Pincar Srl, confirmed Mahindra’s interest on March 26. The Pininfarina family’s investment vehicle said it has been reviewing several options for the firm jointly with its financial institutions. Pincar, which owns about 76 percent of Pininfarina’s stock, ceded control of the stake to banks as a guarantee for debt restructuring in 2012. Those creditors also need to approve a sale.
Pininfarina jumped as much as 3.4% to 5.80 euros and was trading up 1.3% at 12:28 p.m. in Milan, valuing the designer at about 171.5 million euros ($183.4 million). The stock has gained 39% since Bloomberg reported on March 25 that Mahindra was in talks.
The designer already cooperates with Mahindra on SUV development and worked with it on the Halo electric sports-car concept presented at the Delhi auto show last year. Pininfarina could help Mahindra add flair to the Indian manufacturer’s namesake brand and its South Korean carmaking unit Ssangyong.
Pininfarina has also designed the Rolls-Royce Camargue, Cadillac Allante and Maserati Quattroporte. The company has branched out to design projects aside from autos, including residential apartment towers, vending machines and toothbrushes. Mahindra, which bought controlling stakes in Ssangyong in 2011 and PSA Peugeot Citroen’s motorcycle unit early in 2015, had $1.3 billion in cash and shortterm investments at end of fiscal 2014, according to Bloomberg data.