Tech Mahindra Limited, a leading
provider of IT, Networks and Engineering solutions and BPO services, and
Mahindra & Mahindra have jointly entered into an agreement with Pincar
S.r.l., to purchase a controlling stake in Pininfarina S.p.A., an iconic
Italian brand in automotive and industrial design. The deal is worth around 168 million Euros or around US $ 185 million (Rs 1240 crore).
Pininfarina's legendary brand
status will allow Tech Mahindra powerful access to relationships the iconic
designer has nurtured with the best in the world over its 85-year history,
including with Ferrari, Alfa Romeo, Maserati and Peugeot. This will mean an
opportunity for Tech Mahindra to influence product conceptualisation and design
& styling through Europe's best-in-class design house.
As part of the agreement, Tech
Mahindra and M&M shall purchase 76.06 pc of Pininfarina shares from the
current controlling shareholder Pincar S.r.l. at a price of Euro 1.1 per share.
This investment by Tech Mahindra and M&M shall be done via a joint venture
company ("JVCo"), whose ownership shall be held 60 pc by Tech
Mahindra and 40 pc by M&M.
This will be followed by an
open offer for all the remaining ordinary shares of Pininfarina, at the same
purchase price paid for the shares held by Pincar. A rights issue to infuse funds into the
design & styling major will also be executed before the end of 2016.
Pininfarina will continue to
remain an independent company, listed on the Milan Stock Exchange, with Paolo
Pininfarina continuing as the Chairman of its board.
This acquisition will give
Tech Mahindra a critical foothold in key, early-stage conversations in the
automotive and other verticals. Tech Mahindra 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
For Pininfarina, the
acquisition will mean an ability to leverage Tech Mahindra's presence across 90
countries and access to about 780 customers. Tech Mahindra's global delivery
model will lend Pininfarina a newly heightened scale to its operations.
Reinforcing Tech Mahindra's
vision of a world of Connected Solutions, this combine will enable a strong
entry into automotive styling, exclusive vehicles design & development and
reinforced body engineering capability. It also augments Tech Mahindra's
Transportation, Aerospace & Industrial Design offerings. The synergy will
help the duo cross-sell and up-sell their services to existing clients and help
attract new ones.
More from the
Pininfarina’s philosophy of
Purity, Innovation and Elegance will find a perfect fit with Tech Mahindra’s
world of connectedness – where design & styling will, hand in hand with
engineering services, go after a larger market.
well-entrenched Integrated Engineering Solutions (IES) business will complement
Pininfarina's range of offerings. It is now equipped to pursue bigger
opportunities in the outsourced Automotive Engineering Services industry that
totals around USD 10 Billion with a CAGR of 8 per cent. The IES offering will
be able to compete better with traditional western players, with styling,
design and prototyping.
Brand with a
Pininfarina is a styling
company best known for its stunning designs of famous car brands – including
Ferrari, GM, Peugeot and the Alfa Romeo. Started 85-years ago by founder
Battista 'Pinin' Farina, the company is the Italian symbol for jaw-dropping car
designs. It has designed almost 1,000 cars across brands over the years.
The company's enduring
relationship with Ferrari began when 'Pinin' Farina and Enzo Ferrari met in
1951. Farina designed the first Ferrari, the 212, followed by the tremendously
popular 250 GT. Farina's breath-taking designs took Hollywood by storm, too,
inspiring the film 'Sabrina' starring Audrey Hepburn, William Holden and
Humphrey Bogart, along with the Spider that Farina designed.
Anand Mahindra, Chairman of
the Mahindra Group, commenting on Pininfarina joining the Mahindra family,
said, "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”.
"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," according to CP Gurnani, CEO &
Managing Director, Tech Mahindra.
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."
Source: Mahindra & Mahindra