Mahindra To Acquire Pininfarina

Tech Mahindra Ltd., a provider of IT, network and engineering solutions and Mahindra and Mahindra (M&M), part of India’s global $16.9 billion Mahindra Group, entered into an agreement in late 2015 to purchase a controlling stake in Italian automobile and industrial design firm Pininfarina S.p.A.

As part of the agreement, Tech Mahindra and M&M will purchase 76.06 % of Pininfarina shares from current controlling shareholder PincarS.r.l. at a price of 1.1 euros per share. The investment by Tech Mahindra and M&M will be done via a joint venture company with 60% owned by Tech Mahindra and 40% by M&M.

The Italian firm will reportedly remain an independent company with Paolo Pininfarina staying on as chairman.

Tech Mahindra said it will benefit from the designer's presence in the automobile markets of Italy and Germany as well as in the U.S. and China. It will also benefit from relationships the designer has nurtured over its 85-year history, including with automobile manufacturers Ferrari, Alfa Romeo, Maserati and Peugeot. Pininfarina has also designed high-speed trains, buses, yachts, farm tractors and more.

The move is expected to augment Tech Mahindra's transportation, aerospace and industrial design offerings. Following the acquisition, Tech Mahindra said its Integrated Engineering Solutions (IES) business will also be able to better compete with traditional western players when it comes to design and prototyping.

"Pininfarina will add enormous value to Tech Mahindra's portfolio of engineering services,” said Anand Mahindra, chairman, Mahindra Group. “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.”

For Pininfarina, the acquisition is expected to allow it to leverage Tech Mahindra's presence in 90 countries and access to about 780 customers. The IES business is also expected to complement Pininfarina's offerings.

"In a globalized world, entrepreneurship and capital do not need a passport,” said Paolo Pininfarina, chairman, Pininfarina S.p.A. “We are joining hands with a $3.9 billion technology and 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."

The closing is expected in the first half of 2016.