Harley-Davidson rides in to Europe with $109-million MV Agusta acquisition

12 July 2008

America's iconic motorcycle is covering new grounds as it substantially increases it presence beyond its homeland to the continent of Europe. Harley-Davidson yesterday 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 per cent of MV Agusta Group shares for total consideration of approximately €70 million ($109 million), which includes the satisfaction of existing bank debt for approximately €45 million ($70 million).

In addition, the agreement provides for a contingent payment to current chairman Claudio Castiglioni in 2016, if certain financial targets are met. MV Agusta Group is privately held, with the Castiglioni family owning 95 per cent of MVAG shares.

The acquisition is expected to close in the next few weeks, subject to regulatory approvals. Harley-Davidson intends to fund the transaction primarily through euro-denominated debt.

According to Harley-Davidson CEO Jim Ziemer, the acquisition is intended primarily to expand Harley-Davidson'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.