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Harley-Davidson and MV Agusta sign acquisition deal
Last month we brought you confirmation of Harley-Davidson's impending take-over of the MV Agusta Group in a deal valued at $109 million. The two parties have now signed the deal, leaving only regulatory approval to proceed with the acquisition.
Although MV Agusta built nearly 6,000 motorcycles in 2007, production has slipped dramatically this year as the company was over-run with debt. Part of Harley's take-over involves the payment of some $70 million in MV Agusta's outstanding debts. Harley-Davidson announced that Claudio Castiglioni, the current chairman of the group, which also includes Cagiva motorcycles, as well as chief designer Massimo Tamburini, will remain in their posts and the company will continue to operate out of its headquarters in Varese, Italy. However, Harley-Davidson intents to appoint a new management team for MV Agusta, including a new managing director. With such measures in place, we're sure that the partnership between Milwaukee and Varese can only lead to good things for both companies.
[Source: Harley-Davidson]
PRESS RELEASE
Harley-Davidson completes acquisition of MV Agusta
Milwaukee, Wis. (August 8, 2008) - Harley-Davidson, Inc. (NYSE: HOG) today announced the completion of its purchase of the privately-held Italian motorcycle maker MV Agusta Group. The Company has acquired 100 percent of MV Agusta Group shares for total consideration of approximately 70 million euros ($108 million), which includes the satisfaction of existing bank debt for approximately 45 million euros ($69 million)."We are thrilled to welcome the MV Agusta family of customers and employees into the Harley-Davidson family of premium motorcycle brands," said Harley-Davidson, Inc. Chief Executive Officer Jim Ziemer. "Our primary focus with this acquisition is to grow our presence and enhance our position in Europe as a leader in fulfilling customers' dreams, complementing the Harley-Davidson and Buell motorcycle families," Ziemer said.
Retail sales of Harley-Davidson motorcycles have grown at a double-digit rate in Europe in each of the last three years, as the Company has increased its strategic focus on global markets.
MV Agusta Group adds two lines of motorcycles to the Harley-Davidson, Inc. family: a line of exclusive, premium, high-performance sport motorcycles sold under the MV Agusta brand; and a line of lightweight sport 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.
In conjunction with finalizing the acquisition, Harley-Davidson has named Matt Levatich as Managing Director of MV Agusta Group. Levatich, 43, joined Harley-Davidson in 1994 and has served in a variety of roles, including significant positions in Harley-Davidson Europe sales and marketing, based in England. He headed Harley-Davidson materials management as Vice President for four years and most recently was Vice President and General Manager of Parts and Accessories and Custom Vehicle Operations.
Company Background
Harley-Davidson, Inc. is the parent company for the group of companies doing business as Harley-Davidson Motor Company (HDMC), Buell Motorcycle Company (Buell), Harley-Davidson Financial Services (HDFS) and MV Agusta Group (MVAG). Harley-Davidson Motor Company produces heavyweight motorcycles and offers a line of motorcycle parts, accessories, general merchandise and related services. HDMC manufactures five families of motorcycles: Touring, Dyna®,Softail ®, Sportster ® and VRSC™. Buell produces premium sport performance motorcycles and offers a line of motorcycle parts, accessories, and apparel. HDFS provides wholesale and retail financing and insurance programs primarily to Harley-Davidson and Buell dealers and customers. MVAG produces premium, high-performance sport motorcycles sold under the MV Agusta brand and lightweight sport motorcycles sold under the Cagiva brand.
Forward-Looking Statements
Harley-Davidson, Inc. intends that certain matters discussed in this release are "forward-looking statements" intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking statements can generally be identified as such because the context of the statement will include words such as Harley "believes," "anticipates," "expects," "plans," or "estimates" or words of similar meaning. Similarly, statements that describe future plans, objectives, outlooks, targets, guidance or goals are also forward-looking statements. Such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those anticipated as of the date of this release. Certain risks and uncertainties are described below. Shareholders, potential investors, and other readers are urged to consider these factors in evaluating the forward-looking statements and cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements included in this release are only made as of the date of this release, and Harley-Davidson, Inc. disclaims any obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances.
In addition, Harley-Davidson financed a portion of the consideration by borrowing funds and its level of indebtedness increased as a result, which may cause Harley-Davidson to incur additional interest expense and limit Harley-Davidson's ability to obtain additional financing. It could also increase Harley-Davidson's exposure to general adverse economic and industry conditions and adversely impact Harley-Davidson, Inc.'s earnings per share. Furthermore, Harley-Davidson may have challenges successfully integrating or profitably operating the business of MV Agusta Group.
Reader Comments (Page 1 of 1)
Vintage 9:43AM (8/13/2008)
"we're sure that the partnership between Milwaukee and Varese can only lead to good things for both companies."
Yeah, like more tassles.
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John P. 10:00AM (8/13/2008)
Yeah right, tassles. Harley Gets It. MV does what they do best almost as well as Harley does what they best. Both make rolling man jewelry, and I mean that in a good way.
This is probably going to be a great partnership.
Alex 11:13AM (8/13/2008)
I was worried that HD would dilute the MV Agusta brand by gutting their entire upper management and design teams and inserting their own. Fortunately it looks like my fears were unfounded. HD will earn a lot of international respect if it can keep MVA's machines the pinacle of technology, design, and beauty. That seems to be their goal, along with turning a profit.
Lou 9:54AM (8/13/2008)
Good to see MV get some financial support. In the world of motorcycle racing, MV has a very storied history. I think MV bikes will only improve from here. Maybe a Buell and MV collaboration will yield something interesting? Too bad I would never be able to afford one!
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MajorGeek 10:04AM (8/13/2008)
Interesting to watch, last time Harley was in Italy was Amerrachi (spelling?) during the Harley\AMF days, not their finest years. Of course, these things are much more normal now, the V-Rod showed they could successfuly collaborate with others and make an awesome bike.
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fawgcutter 11:34AM (8/13/2008)
It's Aermacchi. What goes around comes around. Aermacchi was acquired by Cagiva back in 1980.
http://en.wikipedia.org/wiki/Aermacchi
Avinash machado 10:16AM (8/13/2008)
Good thing there is no CAFE standards for bikes. Else Harley would have found it very difficult considering the heavy bikes they make.
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Icon149 10:21AM (8/13/2008)
yeah except that Harley full dressers get much better gas mileage than a super light weight japanese rice rocket...
Cafe wouldn't hurt harley as much as it would the companies that relay on sport bikes for revenue. even the buell's get great mileage compared to most of there liquid cooled 4 cylinder competition.
tribonnie 11:00AM (8/13/2008)
Actually, Harleys have some of the most efficient bikes in their class. My dads Road King gets 55-60mpg consistently while most other large cruisers are in the 35-50 range. Our "family" 883cc sportster is usually in the 70-80 mpg range while my 865cc bonneville is at 45-50.
For the sportbikes, we've noticed that the four cylinder machines are generally around 35-40 mpg while the twins (ducati, suzuki, or honda) tend to be 45ish, depending greatly on the rider. Air cooled, fuel injected twins get the best mileage in any class of bike at the price of a bit of power.
The efficiency of Harleys has been mentioned in most comparisons, but is glossed over as it goes against the "American engineers are stupid and only make heavy inefficient crap" line from the '80s. In the handling realm they are similar to other large cruisers (american and japanese), which is why I went with a quirky little brit-bike for more fun and character.
As far as the acquisition, you'll notice that MV keeps all of the technical staff and loses most of the management and business. This is great as HD knows marketing and business better than anyone else on two wheels. If MV can keep unique style, performance, and character as a brand, this will work very well.
John P. 11:06AM (8/13/2008)
Yep, I regulary get over 75mpg with my Harley Sportster when I take it easy. Harley's get great mileage compared to many bikes even close to their size in CC's. I also saw somewhere (maybe autoblog) a guy get 98mpg out of his Harley, Full Dresser, Fat Guy, etc,... Probably would've gotten well over 100mpg with a lighter guy on the bike.
black 11:37AM (8/13/2008)
Actually they get the same really, since economy is sheerly based on displacement, and the way you ride. And the worst a bike gets is 30MPG, so really there's no shame in that...
Alpha 3:30PM (8/13/2008)
The power out-put they get for that mileage per CC doesn't really = power as a 1300 cc Suzuki makes 170+ hp. So drawing a fuel comparison like that would be the same as putting a V8 300c up against a WRX STI. the 300c might get the better mileage even if its heavier but the WRX will clean up performance wise.
black 11:44AM (8/13/2008)
Provided the MV Agusta brand isn't diluted by HD, which isn't really going to happen, this could work. After all, this is Harley Davidson, a well managed company, not GM. If anything, Buell probably could gain from this since they don't have to outsource their engine work (like they did for the 1125R), and maybe make more ascetically pleasing bikes on the side too.
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Lou 11:47AM (8/13/2008)
The Harleys are very efficient. They better be with the anemic output as delivered from the factory. I had a Buell with a 1200cc Vtwin that could breathe...did not get near the mileage my 1200cc Sporty got. I find it amazing there are 190 to 200 HP bikes that get in the 30's. Would like me one of the new V-Maxes!!!!
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