Harley agrees to buy Italian cycle maker
July 11, 2008

Harley-Davidson Inc. (HOG) said today it has agreed to purchase Italian motorcycle maker MV Agusta Group for $109 million, expanding its presence in Europe.

The acquisition of privately held MV Agusta is expected to close in several weeks. Milwaukee-based Harley-Davidson said it expects to finance the transaction primarily through euro-denominated debt.

MV Agusta Group has two families of motorcycles: a line of premium, high-performance sport motorcycles sold under the MV Agusta brand; and a line of lightweight motorcycles sold under the Cagiva brand. 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, Harley said in announcing the deal.

Harley-Davidson plans to continue to operate MV Agusta Group from its headquarters in Varese, Italy. MV Agusta Group Chairman Claudio Castiglioni will continue as chairman and will play a major role in product development. The terms of the acquisition include a contingency payment to Castiglioni in 2016, if certain financial targets are met. The Castiglioni family owns 95% of MVAG shares.

Harley-Davidson said the acquisition is intended primarily to expand its presence and footprint in Europe. 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.

Harley-Davidson to buy MV Agusta
July 11, 2008 7:38 AM ET

MILWAUKEE (AP) - Harley-Davidson Inc. said Friday it agreed to buy Italian motorcycle maker MV Agusta Group for about $109 million to boost its presence in Europe.

The company said the purchase prices includes existing bank debt for about $70 million.

Under the agreement, Harley-Davidson will also pay Claudio Castiglioni additional payments in 2016 if certain financial targets are met. MV Agusta is privately held, with the Castiglioni family owning 95 percent of the shares. Claudio Castiglioni will continue to serve as chairman.

MV Agusta makes a line of premium sport motorcycles under its name brand and a line of lightweight motorcycles under the Cagiva brand.

Harley-Davidson said it will operate the company from its headquarters in Varase, Italy. The company said it will appoint a new managing director once the deal closes.

The acquisition is expected to close in several weeks.

Harley-Davidson said it will fund the deal through euro-denominated debt.