Indian manufacturer Mahindra has bought Italian design house and coachbuilder Pininfarina in a deal worth a reported €168 million (about £122 million).
The deal involves Mahindra purchasing a controlling interest of 76.06% in Pininfarina. An open offer for the remaining shares will be issued later. Pininfarina will continue to remain an independent company, with Paolo Pininfarina continuing at the head of its board.
Mahindra will also invest €20 million into Pininfarina and provide a guarantee to creditors of €114.5 million.
Speaking at the announcement, Mahindra boss Anand Mahindra said: "The legendary high-end design credentials of Pininfarina will significantly enhance the design capabilities of the entire Mahindra group. Given the increasing design sensibilities of today's consumers, product design will greatly influence customer choice."
It's understood that the deal is intended to give Mahindra more of an international footing and forge relationships with more European manufacturers through Pininfarina's connections. In return, Pininfarina will have access to greater economies of scale, bringing down the costs of manufacturing.
The Pininfarina deal is the latest acquisition by Mahindra, following its takeover of Ssangyong and PSA Peugeot Citroen's motorcycle unit.
Pininfarina had been operating at a loss for some years and had racked up a debt of €52.7 million (£37m). Negotiations between Pininfarina’s creditor banks, main Pininfarina shareholder Pincar and Mahindra have culminated in the deal.
Paolo Pininfarina said: "In a globalised world, entrepreneurship and capital do not need a passport. Being part of the global Mahindra group will not only strengthen our Italian identity but will also open more doors."