A controlling stake in Pininfarina has been bought by Tech Mahindra and Mahindra in a joint venture and this is going to open up a lot of new opportunities for both the companies.
Tech Mahindra is known as a leading IT company in India that provides services related to networks, engineering solutions and BPO services while we all know Mahindra & Mahindra as a leading Indian automaker. Both the companies have now jointly bought a stake in top Italian design firm Pininfarina. The companies signed an agreement with Pincar S.r.I to buy a controlling stake in Pininfarina S.p.A. This deal will help Tech Mahindra get full access to all the business deals that Pininfarina has done in the best and the Indian company will now be able to influence product conceptualisation through the design house.
According to the terms of the agreement, Tech Mahindra and M&M will purchase 76.06% of the company’s shares from Pincar at a price of Euro 1.1 per share. This particular investment will be done through a joint venture company JVCo and that company’s ownership will be held 60% by Tech Mahindra and 40% by M&M. Then they will give out an open offer to buy out all the other shares of Pininfarina at the same purchase price paid for the shares held by Pincar.
A rights issue to infuse all the funds into Pininfarina will be executed by the end of 2016. Mr. Paolo Pininfarina will continue to remain the chairman of the the company and it will continue to run as an independent company listed on the Milan Stock Exchange. This deal is going to be a win-win situation for all the parties involved. Pininfarina will be able to use Mahindra’s presence across 90 countries and will get access to more than 780 customers while Tech Mahindra will also benefit from the design company’s presence in markets like China, Germany, Italy and the US.
Tech Mahindra’s transportation, Aerospace & Industrial Design offerings will also benefit from this. Tech Mahindra has an Integrated Engineering Solutions business that will be complimenting Pininfarina’s offerings. The IES will be enabled to compete in a better way with rivals thanks to improved styling, designing and prototyping. Styling is one of the most crucial factor for a vehicle in India and this deal will further make Mahindra’s portfolio strong in the future.