There has to be a bevy of high-fives going on in Milwaukee right now, as Harley-Davidson has finally unloaded MV Agusta from its holdings (we broke the news on the purchase earlier this morning). Harley-Davidson bought MV Agusta for $109 million back in 2008 (most of which was bad debt), and now just a little over two years later is making a tidy profit of…well, nothing. After wiping the books clean, investing in new infrastructre, and getting MV Agusta back on track with an all new model line-up (with a bike on the way), Harley-Davidson saw a paltry sum of €1 cross its desks. Harley-Davidson shares are down 3.5% as of this writing.
Instead Harley-Davidson is calling things even with the Castiglioni family, who would have seen a stock pay-out had the company exchanged hands with another buyer, like TPG for instance. The Castiglioni’s stock was worth somewhere between €20-€30 million, and now with 100% ownership, the Italians are free to once again run MV Agusta into the ground, just like they did leading up to 2008.
Harley-Davidson & MV Agusta press releases are after the jump. One interesting point of note that taking the helm of MV Agusta is former Ducati General Manager and Chief Engineer Massimo Bordi. Bordi was once offered the job of CEO at Ducati, but turned it down, and the position was filled by Gabriele del Torchio, Ducati’s current CEO. Bordi’s last item of business at Ducati was trying to sell the Italian brand to Harley-Davidson, which makes for some good irony in today’s announcement.
HARLEY-DAVIDSON FINALIZES SALE OF MV AGUSTA
MILWAUKEE, Aug. 6, 2010 — Harley-Davidson, Inc. (NYSE: HOG) has concluded the sale of its subsidiary, MV Agusta, to Claudio Castiglioni and his wholly owned holding company, MV Agusta Motor Holding, S.r.l., effective today.
Castiglioni is the former owner of the Italian motorcycle maker and has served as MV Agusta’s chairman since 2008, when Harley-Davidson acquired the company.
In October 2009, Harley-Davidson announced its intention to sell MV Agusta as part of a new corporate strategy to focus resources on the Harley-Davidson brand. Since then, Harley-Davidson has held discussions with various potential MV Agusta buyers.
“MV Agusta is a proud brand and we wish Mr. Castiglioni and the company’s employees well,” said Harley-Davidson President and Chief Executive Officer Keith Wandell. “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 IS ITALIAN AGAIN
Varese, August 6th 2010 – Claudio and Giovanni Castiglioni, through their family holding company have repurchased from Harley Davidson 100% of the shares of MV Agusta Motor S.p.A. which owns historic brands MV Agusta and Cagiva.
Harley-Davidson announced in October 2009 its intention to sell MV Agusta to concentrate on its core business and brand.
In connection with the repurchase transaction Lazard and Co. have acted as the financial advisor along with counsel Alessandro Varrenti (CBA) and Giuseppe Galeano whom provided legal and tax assistance in conjunction with family counsellors Giuseppe Carteni (Leadlaw), Andrea Lanata and Sergio Caramella. Along with Giovanni Castiglioni, the company will be headed by Mr. Massimo Bordi, a well known Italian manager. A 62-year-old engineer, Bordi took Ducati to success during the years when that company was owned by the Castiglionis and continued to manage it successfully under the ownership of Texas Pacific Group. Since 2003 Massimo Bordi has been the CEO of Same Deutz Fahr, contributing largely to the success of the company. Massimo Bordi commented that “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.”
Claudio Castiglioni, the historic intimate soul of MV Agusta will continue as chairman, and will concentrate on the development of the new products. Upon signing the agreement with Harley-Davidson, Claudio Castiglioni stated “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”.
Source: Harley-Davidson & MV Agsuta
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$109 million lost in this deal, $125 million thrown away shutting down Buell…….
It looks more like HD is the company running itself into ground.
Officially Official: Harley-Davidson “Sells” MV Agusta to Castiglioni Family – http://aspha.lt/193 #motorcycle
So if I have this correct Harley paid $109 million 2 years ago and today gets 20 to 30 million Euro’s; maybe a third of what they paid……. are these people nuts or something???? Corporate incompetence at the shareholders expense. Just like used car salesmen and life insurance agents, they wonder why everyone has a healthy disrespect for them!
Too bad they couldn’t bring themselves to do the same for the last REAL American motorcycle company: Buell. Guess they were afraid of having an innovative, forward-looking subsidiary diluting their “brand”.
What does HD do after all the wanna-be weekend bad boys trade in their pirate costumes for RVs?
“Whaddaya MEAN it’s not air-cooled?”
The CEO is a know it all d-bag that at the time thought anything they touched would instantly turn to gold.
Andre it’s worse than you think. HD didn’t get 20-30 million euros out of the deal…they got 1 euro.
This Castiglioni has made a habit of himself of selling MV Agusta for huge hundred million dollar deals to various companies and then buying it back for 1 Euro In Decemebr 2004 Proton , the Malaysian carmaker which is also owner of the legendary Lotus sports cars, bought 57.7% of MV for 70 million euros (Husky and Cagiva incl.) It was sold for Euro 1 to Gevi Spa a year later as MV incurred 107 million euros of debt…Husky was then sold off to BMW for cool 93 million euros….Harley acquired 100 percent of MV for 70 million euros ($107 Million) out of which 45 million euros wen to debt payments. Now MV is again back with Castiglioni for Euro 1…Amazing..the way this guy pulls the threads from behind that even big companies are left bamboozled
That is pretty impressive!
I wish Claudio and MV all the luck this time around. It looks like they are in better shape now, since HD paid off their debt and tooled up for a few new models. However, this alone doesn’t guaranty success. What a company like MV needs is access to large amounts of capital and good management assuring that capital is used and invested properly. This is the main reason for Ducati’s turnaround. TPG installed good management and invested smartly to rebuild Ducati from old school, to a modern high tech company it is today. MV needs exactly that kind of investment to assure success in the future.
Now the Castiglioni family has pulled this trick twice, first to Proton, and now to HD, doesn’t all of this sound fishy? Pocketing millions by selling the company to others; still staying on as the company head while running the company to the ground, and later buying it back for 1euro.
Harley lost 120 million closing Buell, 100 million on this deal and they owe Warren Buffet 650 million from there failed financial services division. That’s almost a billion dollars of stupid corporate moves. This company is run by morons and I am glad I do not have stock in HD. Harley has no new models in there stupid line up and no money for R&D.