It’s been speculated for months but today Indian conglomerate Mahindra & Mahindra finally announced it has acquired legendary Italian design firm Pininfarina. Mahindra, together with its Tech Mahindra subsidiary that specializes in IT systems and engineering consultancy, will acquire a 76.06 percent stake in Pininfarina from the design firm’s parent company Pincar.
Mahindra is paying approximately 33 million euros ($36 million) for the stake. Mahindra will also provide a cash injection of about 20 million euros into Pininfarina’s coffers through a rights issue, plus guarantee the design firm’s outstanding debts.
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The good news is that Pininfarina is set to remain an independent firm with its own stock market listing, which means it should still continue to offer design services for firms unrelated to Mahindra. Paolo Pininfarina, the grandson of company founder Battista ‘Pinin’ Farina, will also stay on as chairman.
Pininfarina, which is famous for its numerous Ferrari designs, has been crippled with losses and mounting debts ever since its failed attempt to expand into the world of car building during the past two decades. The entire automotive design industry has also suffered as more and more automakers, including Ferrari, utilize their own design staff rather than outsourcing. For example, rival Italian firm Bertone went bankrupt in mid-2014.
Ownership by Mahindra will help provide stability for Pininfarina, while in return Mahindra’s automotive division will benefit from Pininfarina’s design services and relationships with numerous firms.
“Pininfarina will add enormous value to Tech Mahindra's portfolio of engineering services,” Mahindra chairman Anand Mahindra said in a statement. “But just as important is the fact that the legendary high-end design credentials of Pininfarina will significantly enhance the design capabilities of the entire Mahindra Group."