Mahindra Officially Buys Italian Design House Pininfarina for $ 28 Mil

The company's official statement confirms that Tech Mahindra and M&M shall purchase 76.06 % of Pininfarina shares from Pincar S.r.l., the current controlling shareholder. The shares have been brought at the price of Euro 1.1 per share. Additionally Mahindra has claimed that it will pay the creditors of Pininfarina more than $125 million, and will invest a further $20-plus million into the company. All in, Mahindra's investment into Pininfarina will be near $185 million.

As mentioned above, the majority shares will be owned by both Tech Mahindra and M&M via a joint venture company ("JVCo"), whose 60 % ownership shall be held by Tech Mahindra and the remaining 40 % by M&M. Additionally, Mahindra has also revealed its plans to buy off the remaining shares soon and the rights issue to infuse funds into the design & styling major will also be executed before the end of 2016. That being said, Pininfarina will continue to remain an independent company, listed on the Milan Stock Exchange, with Mr. Paolo Pininfarina continuing as the Chairman of its board.

With this new merger, Tech Mahindra will get a critical foothold in key, early-stage conversations in the automotive and other verticals. The company will also benefit from the designer's focused presence in Italy and Germany, the hotbeds of European automotive manufacturing, as well as in the US and an emerging automotive market, China. On the other hand Pininfarina will get the ability to leverage Tech Mahindra's presence across 90 countries and access to about 780 customers.

"Pininfarina will add enormous value to Tech Mahindra's portfolio of engineering services. 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. Given the increasing design sensibilities of today's consumers, product design will greatly influence customer choice and experience, and hence our success," said Mr. Anand Mahindra, Chairman of the Mahindra Group on the merger.

Paolo Pininfarina, Chairman Pininfarina S.p.A. added, "In a globalized world, entrepreneurship and capital do not need a passport. We are joining hands with a $ 3.9 Billion Technology & Global partner, and part of the $ 16.9 billion global Mahindra Group, which will not only strengthen our Italian identity but will open more doors. Tech Mahindra's global presence and global delivery model will allow us to compete for a larger pie of the business."

Mr. CP Gurnani, CEO & Managing Director, Tech Mahindra on the other hand said, "Our clients want more from us, consistently. Adding Pininfarina's legendary design skills to our Integrated Engineering Solutions enables a strong entry into Automotive styling, design & development and reinforces our body engineering capabilities. Further, Pininfarina's 25-year design expertise in industries beyond Automotive will give us that winning edge in areas such as Aerospace, Consumer Electronics, Architecture & Interiors and Transportation where we already have a strong footprint."