Harley Davidson buys MV Agusta and Cagiva

Harley Davidson is buying motorcycle manufacturers MV Agusta and Cagiva in a massive £56 million (70 million Euro) deal.

The MV Group is currently owned almost entirely by the Castiglioni family with Claudio Castiglioni at the helm but the deal will see ownership move to Harley Davidson while Claudio Castiglioni stays on as chairman.

The man responsible for the styling of many of the most iconic MV’s in recent years, Design Chief Massimo Tamburini, will stay on in his current role so we should see plenty more drool-worthy bikes from the Italian firm.

The deal is expected to be closed in a few weeks time, as long as there are no regulatory problems, and the first priority for Harley Davidson is to get production back up to speed after it slowed in recent months when MV Agusta started to have financial problems.

Check out the next page to see the full press release

• Buy used Harley-Davidson’s here
• Buy used MV Augusta’s here
• Buy used Cagiva’s here

Harley-Davidson to Acquire MV Agusta Group Expanding Presence in
2008-07-11 11:00:59.590 (New York)

    MILWAUKEE, July 11 /PRNewswire/ —

    – Italian Company Known for Premium, High-Performance Motorcycles

    Harley-Davidson, Inc. (NYSE: HOG) today announced the signing of a
definitive agreement to purchase the Italian motorcycle maker MV Agusta Group
(MVAG). Under the agreement, Harley-Davidson will acquire 100 percent of MV
Agusta Group shares for total consideration of approximately 70 million euros
(US$109 million), which includes the satisfaction of existing bank debt for
approximately 45 million euros (US$70 million). In addition, the agreement
provides for a contingent payment to Claudio Castiglioni in 2016, if certain
financial targets are met. MV Agusta Group is privately held, with the
Castiglioni family owning 95 percent of MVAG shares.

    The acquisition is expected to close in several weeks, pending the
satisfaction of contingencies and receipt of regulatory approvals.
Harley-Davidson intends to fund the transaction primarily through
euro-denominated debt.

    MV Agusta Group has two families of motorcycles: a line of exclusive,
premium, 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. The company sells its products through about 500 dealers
worldwide, the vast majority of them in Europe. In 2007, MVAG shipped 5,819
motorcycles. During 2008 MVAG has significantly slowed production due to
financial difficulties.

    “Motorcycles are the heart, soul and passion of Harley-Davidson, Buell and
MV Agusta,” said Harley-Davidson, Inc. Chief Executive Officer Jim Ziemer.
“Both have great products and close connections with incredibly devoted
customers. The MV Agusta and Cagiva brands are well-known and highly regarded
in Europe. They are synonymous with beautiful, premium, Italian performance
motorcycles,” Ziemer said.

    Harley-Davidson, Inc. plans to continue to operate MV Agusta Group from its
headquarters based in Varese, Italy. Following closing, the first priority will
be to appoint a leadership team to include a new Managing Director and to
resume the manufacture of current models.

    Current MV Agusta Group Chairman Claudio Castiglioni will continue in a
leadership role as Chairman and will play a major role in future product
development. Design Chief Massimo Tamburini will continue his leadership of MV
Agusta Group’s world leading sport-bike design studio.

    “We take enormous pride in MV Agusta and Cagiva motorcycles,” said
Castiglioni. “Our riders seek an uncompromising experience in premium
performance motorcycles. And with Harley-Davidson’s deep understanding of the
emotional as well as the business side of motorcycling, I have great confidence
that our motorcycles will excite customers for generations to come.”

    According to Ziemer, the acquisition is intended primarily to expand
Harley-Davidson, Inc’s presence and footprint in Europe, complementing the
Harley-Davidson and Buell motorcycle families. 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.

    “The acquisition of MV Agusta Group will enhance Harley-Davidson, Inc’s
position as a global leader in fulfilling customer dreams and providing
extraordinary customer experiences. We look forward to a long relationship with
the MV Agusta and Cagiva families of customers and employees,” said Ziemer.

    Conference Call

    Harley-Davidson, Inc. will hold a webcast conference call regarding the
acquisition from 8:00 to 8:30 a.m. (central time) today, July 11, with Tom
Bergmann, Executive Vice President and Chief Financial Officer,
Harley-Davidson, Inc. To access the webcast, please log on and register at
least ten minutes prior to the start time at http://www.harley-davidson.com,
under the Investor Relations section. A replay of the webcast will be available
at the same location approximately two hours after the call concludes.

    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) and Harley-Davidson Financial Services (HDFS). 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(R), Softail (R), Sportster (R) and
VRSC(TM). 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.

    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.

    Although Harley-Davidson and MV Agusta Group have signed a definitive
purchase agreement, there is no assurance that all of the contingencies will be
satisfied or that the governmental approvals will be obtained in a timely
manner or at all. The proposed acquisition may not occur if the conditions to
completing the transaction are not satisfied in a timely manner.

    In addition, Harley-Davidson intends to finance a portion of the
consideration by borrowing funds and its level of indebtedness may increase 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.

    Web site: http://www.harley-davidson.com

 

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