MV Agusta Sale
In October 2009, Harley-Davidson officially announced that it would sell its subsidiary, MV Agusta, in effort to concentrate on building their core brand.But no deals were made.That was until Friday, when the Motor Company reported it sold MV Agusta to Claudio Castiglioni and his owned holding company based in Italy, MV Agusta Motor Holding, S.r.l.Keith Wandell (H-D President and CEO) says: “MV Agusta is a proud brand and we wish Mr. Castiglioni and the company’s employees well. Our decision to divest MV Agusta reflects our strategy to focus our efforts and our investment on the Harley-Davidson brand, as we believe this provides an optimal path to long-term growth.”MV Agusta will be headed by Massimo Bordi, a well-known businessman in Italy who made Ducati a success when Castiglionis owned it. Bordi managed Ducati under the ownership of Texas Pacific Group. According MV Agusta, since 2003, Massimo Bordi has been the CEO of Same Deutz Fahr, contributing largely to the success of the company.Massimo Bordi says: “MV Agusta has full capacity to once again become a major player in the high luxury brand motor bikes, this brand is one of the most recognized worldwide. We will implement a number of reorganization and managerial actions in the near future. Both the current and new models under development have a very strong character, great innovative features and a very unique design, I have no doubts about their future success.”Castiglioni has served as the official chairman of MV Agusta since Harley purchased it in 2008, and will continue as chairman, concentrating on the development of the new products. Upon signing the agreement with Harley-Davidson, Claudio Castiglioni statedClaudio Castiglioni says: “MV Agusta is the crown jewel of Italian motorcycles, I am thrilled to have completed this transaction. I have already won once together with Massimo Bordi, we made the most beautiful bikes in the world and we will continue with this tradition.”In July 2008, Harley acquired 100-percent of the Italian moto maker MV Agusta Group for $109 million, which includes the satisfaction of existing bank debt for approximately $70 million. The original agreement also would provide a contingent payment to Claudio Castiglioni in 2016 if certain financial targets were met.When Harley originally purchased the company, MV Agusta Group had two families of motorcycles: high-performance sport motorcycles sold under the MV Agusta brand, and a line of lightweight motorcycles sold under the Cagiva brand. MV Agusta’s F4-R motorcycle, powered by a 1078cc in-line four-cylinder liquid cooled engine, is rated at 190 hp.MVAG sold its products through about 500 dealers worldwide, the vast majority of them in Europe. But at the time of Harley’s purchase in 2008, MVAG had significantly slowed production due to financial difficulties. But by March of 2010, while backed by Harley MVAG had reported that its sales were up 50-percent from 2009.MV Agusta has a rich history, beginning during the post World War II reconstruction period in 1945. Due to the finance struggles of time, two brothers from Cascina Costa, Italy, near Milan, who owned an aviation company (Agusta) decided to build cheap transportation .The brothers involved were Count Vincenzo Agusta and his brother Domenico, (MV stands for Meccanica Verghera, Mechanic and town of Verghera in Italy). The company would soon enter the world of motorcycle racing, and by 1980, MV Agusta would have 75 World Titles (38 riders championships and 37 constructors championships). The company’s success was built upon racing.But due to the death of Count Domenico in 1971, the company lost its guiding force, and ceased production in 1980. The Italian motorcycle company Cagiva bought the MV Agusta name in 1991, and by 1997 the new MV Agusta models were released, the legendary F4 Serie Oro, which featured a 750cc inline four.But finance problems would continually drag the company down. In 2004, the Malaysian car producer Proton bought MV Agusta, selling it to a Genoa-based finance company Givi SpA the following year, which brought the company back to Italy.Harley took its turn in 2008, but under financial distress, H-D decided to divest its interest in both MV Agusta and Buell, its other subsidiary. Buell was terminated in October of 2009, Harley saying they needed to focus more on their core brand.Now that MV Agusta is also gone, Harley has additional freedom to focus on their core brand.