Harley Davidson to Acquire MV Augusta

Spectre

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From: http://www.foxbusiness.com/story/ma...a-group-expanding-presence-europe/-1073619092

MILWAUKEE, Jul 11, 2008 (PR Newswire Europe via COMTEX) ----Italian Company Known for Premium, High-Performance Motorcycles

Harley-Davidson, Inc. (NYSE: HOG: 33.25, -0.45, -1.33%) 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.

In other news, the Harley workers in York, PA went out on strike in February for most of the month. Now they're getting laid off due to "lack of demand". And they're complaining about how Harley is buying Augusta.

Well, maybe if they didn't produce the LOWEST QUALITY CRUISERS IN AMERICA AT THE HIGHEST PRICE, they'd still have sales even in economic hard times. All the other makers are laughing all the way to the bank with the sudden motorcycle boom. I guess a $30,000 cruiser that can't keep up with its $15,000 Honda counterpart and gets half the fuel mileage is a pretty hard sell, though. Guess the "Harley Davidson Lifestyle" is a harder sell these days...


/alternatecomment: I guess Harley finally got a modern engineering department.
 
Well, like Ferrari, they'll make it all back on Harley merchandise.

(I was going to post a link to the most ridiculous and fatuous item in that store, but they're all equally obscene. So there.)


MV Agusta? Really? Are they actually making enough money to justify any sort of takeover? I've never actually seen a Brutale or one of those insane overpriced special edition F4s anywhere in America.
 
Isn't Buell supposed to be a high performance sport bike manufacturer? How does Buell compare to MV Agusta and Cagiva?
 
Buell is more of a high-amount-of-fun manufacturer. They still use only slightly tuned Harley V2s, but their suspension geometry is aimed at owning the backroads. Basically they are street fighters.
 
And, since they use Harley engines, not very good streetfighters at that.

MV Agusta? Really? Are they actually making enough money to justify any sort of takeover? I've never actually seen a Brutale or one of those insane overpriced special edition F4s anywhere in America.


Augusta's big problem in the US is their lack of a dealer network and their poor choices of partners when they tried to expand it. I've seen a few of them here, but they just don't have a dealer network, something Harley can fix for them.
 
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As long as they keep the design "Italian", I don't see a problem there. It's just funny to see that the same company will produce such diverse bikes.
 
I don't think (hope) Harley is stupid enough to thrust themselves upon MVA and their design department.
 
I don't really know bikes but like cars i am sure that there is small differences between cars.

Can you guys show me what is the difference of an American bike from an Italian design. I know a hog but the sports bikes look all the same to me.
 
I think the purchase has less to do with Harley or MVA Stateside as much as it has to do with Europe. Harley lately has seen Europe as a new market for the to attack, they recently released a bike that is Eu only for the time being (they will bring it to the state in time). This might be there way to get a foothold in the Europe market thru another brand name as well a different market other then cruisers. Diversifying is not a bad thing for HD, and maybe some of the MVA Sportbike-ness will rub off to HD and Buell.

Also it seems to be MVA does watercooled bikes (dont know the brand well) and that might be something else Harley wants to get its hands on. The days of Air Cooler motors are numbers, at lest for mass productions, and the V-Rod is a great motor but Harley might be looking to get its hand on others motors for Buell and maybe even HD own bikes. But if that is the case, i can see HD going back to Porsche to work with them. But the trend with Tech companies have been lately buy new technology that maybe you cant develop.

As for HD current sales issue, well Spectre you just got a bad bike in the past so shh =P But the issue more has to do with the insane sales growth HD saw a few years back with a strong Economy and a new passion in Choppers as seen with popular shows like American Choppers and etc. Everyone wanted a Harley Chopper, and a lot went looking at HD. And then you also had the 100th Anniversary of the company and that also help spur growth as HD turned that in to a great marketing move with the paint scheme that a lot of people loved and releasing some new bikes at the same time. This pushed the Harley market in to a MSRP and plus sales area.

Come today, and Harley tried going back to the watering hole with a 105th anniversary model that is just butt ugly and over produced A LOT of bikes expecting the same amount of demand. Well it just means you can walk in to a HD dealer and a good number of bikes are still sitting on the lot below MSRP and some below invoice I am told from my last trip to the dealers.

Deviate,
Harley does have a sportbike line from Buell and they look more like this
081125R344.jpg

And the engine for this bike is actually sourced from Rotax which in the past has supplied BMW and Aprilia.
 
I'm familiar with Buell.

I don't consider it to be a Harley. They were another company that Harley bought out, not a brand created by Harley themselves. Similar to the MVA buyout.
Humm, well you are part in part true. It was started by a former Harley Engineer who wanted a race motorcycle, and later wanted to make street performance bikes using Harley engines. Harley then invested in the company to spur its growth and later on took full control. So its a lot different then MVA where Harley is coming in and buying a turn key operation.
Who you would not consider it Harley is beyond me...

Cobol74:
Yeah it seems so http://en.wikipedia.org/wiki/Rotax
 
I'm pretty sure Buell has its own board of directors, its own CEO and its own research and development team.

Erik Buell didn't develop his bikes as an employee of HD. HD didn't give him the support he needed, so he struck out on his own then later sold the company to HD.

Part of the same company? Sure. Is the Buell a Harley? Nope.

*sigh*
Google and wiki are you friend before you post.

Is that why most Buell's use the Harley Davidson 1200CC V-twin motor (modified of course)?

If you check out the history, yeah he started the company on his own and has a lot of unique designs like the fuel in frame setup and etc. But starting 93 he started to get help form HD is sourcing Engines and come 98 HD took full control of the company. Its not publicly traded and full owned by HD, so, the likelyhood that it has its "own" board if it even has one, it would be appointed by HD themselves. And while HD might give Buell its own R&D I bet most of it is shared. Why would you own a company and let them reinvent things that you already do.

And a lot of Buells fans I know wish that maybe HD should let Buell have the control you stated and spin the company off, as HD does provide great deal network and money to keep the company aflot it does some bone headed moves like keeping the price too high compared to other Jap bikes and using Harley own engines in them. They feel Buell should be developing its own motors. Maybe the move with MVA might be a move towards that..

Most of the Buells that made it to the road came during the HD period, so I dont understand why it makes a difference if its a HD or not.
You can read some more on Buell's History here: http://findarticles.com/p/articles/mi_m0KJI/is_8_118/ai_n16702057/pg_1?tag=artBody;col1 or check out the wiki.
 
The reason that they use a Rotax engine in some of them is because the Harley motors (as Harley themselves proved with the VR1000) just aren't competitive. :p
 
Harley's idea of a sporty motorycle:
sportster_large.jpg
Well ...
2007-Harley-Davidson-XR1200prototypea.jpg

XR1200, I think it's already been released in Europe? Great sound and likely it's got decent handling. Of course, it will still be overpriced and uncompetitive in its class, but I might try to pick up one second hand in a few years.
 
One question chaps, I can not think of a single instance of a US company buying an Italian one and making a success of it - anyone know of one - I shall be wondering all night now.
 
TPG (Texas Pacific Group), the American venture capital firm, rescued Ducati from bankruptcy and made them profitable.
 
Yes venture Capital OK I can get that, but what about a same business line company - I still think it not likely to succeed myself - hopefully I am wrong - Chrysler / Mercedes anyone?
 
I guess a $30,000 cruiser that can't keep up with its $15,000 Honda counterpart and gets half the fuel mileage is a pretty hard sell, though.

Spectre, i think you know i respect you and all, but these blatant Honda endorsements are getting really really annoying. I understand 75% of bikes ever sold are Hondas. I understand they never break and don't have stupid relays. I understand that its one of the only Japanese companies that was started by a man rather then a corporation, but FOR THE LOVE OF GOD, LAY OFF ABOUT THEM ALREADY!!!
 
I like Hondas too. Had a 250 superdream in the 70s fine piece of kit to get to work on - right that is enough from me on Hondas - promise.
 
Spectre, i think you know i respect you and all, but these blatant Honda endorsements are getting really really annoying. I understand 75% of bikes ever sold are Hondas. I understand they never break and don't have stupid relays. I understand that its one of the only Japanese companies that was started by a man rather then a corporation, but FOR THE LOVE OF GOD, LAY OFF ABOUT THEM ALREADY!!!

No. :mrgreen:

Seriously, though, Harley's biggest competitor *is* Honda and that's the natural comparison there. You could easily insert Yamaha, Kawasaki, or Suzuki for Honda and still have been just as correct, when comparing to H-D.

If your product costs twice as much as the competition and isn't even half as good, why would people want to buy your product? Unless you're selling a "lifestyle", which is what H-D does. Which is my point.
 
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