MUMBAI (Reuters) - India's Mahindra group, with interests in cars and tractors, finance and IT outsourcing services, is to buy Italian car designer Pininfarina (MI:PNNI) for about 33 million euros (£24 million) in an all-cash deal.
Milan-listed Pininfarina, which has designed cars for Ferrari (N:RACE), Maserati, Rolls-Royce (L:RR) and Cadillac, is the latest Italian industrial brand to be snapped up by an Asian buyer. In March, China National Chemical Corp agreed to buy into tyre-maker Pirelli in a 7.3 billion euro deal.
Mahindra will do the deal via a new unit in which automaker Mahindra & Mahindra Ltd (NS:MAHM) will hold 40 percent and Tech Mahindra Ltd (NS:TEML), the IT outsourcing arm, will own the remaining 60 percent, Mahindra said on Monday.
The Mahindra joint venture will buy 76.06 percent of Pininfarina for 1.1 euros per share and will also make an open offer to public shareholders for the remaining 23.94 percent stake at the same price.
Mahindra will also inject 20 million euros into Pininfarina through a rights issue, and will provide a guarantee worth up to 114.5 million euros to the car designer's lenders, creditors and lessors, the company statement said.
Pininfarina, which owes its name to the nickname of its founder Battista Farina, who was known as "Pinin" Farina, had net debt of 47.4 million euros at the end of September.
Mahindra first approached Turin-based Pininfarina at the beginning of this year but its links to Pininfarina go back to 2013 when the Indian company hired Hubert Tassin, a former Pininfarina designer.
The Italian company has been loss-making for years partly because carmakers have brought design in-house rather than hire independent design firms.
Mahindra has a reputation for buying undervalued companies. In 2010, it bought troubled South Korean automaker Ssangyong Motor and last year it acquired a majority stake in France-based Peugeot's loss-making scooter business.