Did Harley-Davidson Have to Pay Buyer to Unload MV Augusta?
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Thread: Did Harley-Davidson Have to Pay Buyer to Unload MV Augusta?

  1. #1
    Moderator Array Shovelhead's Avatar
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    Did Harley-Davidson Have to Pay Buyer to Unload MV Augusta?

    Harley sold MV Augusta for a whopping 3 euros (about $5)

    Story below:

    By Jonathan Welsh

    Getty ImagesMV Agusta’s sport bikes like this exotic F4 were not a good fit in Harley-Davidson’s lineup.
    Motorcycle maker Harley-Davidson completed the sale of MV Agusta, its sport-bike business based in Varese, Italy. The company’s announcement didn’t include the sale price but its 8-K filing with the Securities and Exchange Commission revealed the company essentially paid MV Agusta’s former owners to take it back.
    In the filing Harley said it “contributed 20 million Euros to MV as operating capital” that was put in escrow and is available to the buyer over a 12-month period. The buyer is Claudio Castiglioni, who, with his brother Gianfranco, ran MV Agusta for years before selling it to Harley two years ago for about $109 million.
    At the time Harley was concerned that its core baby-boomer customers were getting older and losing their will and ability to ride motorcycles. So it bought MV Agusta, a maker of expensive, exotic, high-performance sport bikes as a quick way to attract younger buyers. But the strategy never worked out. While MVs are wonderful bikes for purists who treat each motorcycle ride almost like a gym workout, riding them in traffic or as casual transportation can be a chore. They are also prohibitively expensive for many motorcycle enthusiasts.
    In the filing Harley also said it received “nominal consideration” from the buyer. In a subsequent interview the company said the specific amount it received was $3 Euros. A company spokesman said the terms of the transaction “reflect the realities of the current economic environment and the difficult conditions” in the sport-bike market. Motorcycle sales in the U.S. have been sagged in the past few years after more than a decade of steady growth. Unlike cars, which began a recovery this year, motorcycles are typically discretionary purchases — the type consumers give up during difficult economic times.
    Harley has previously write-downs totaling $162.6 million for the fair value of MV Agusta and began treating the unit as a discontinued operation after announcing its intention to sell it a year ago. The company said it anticipate additional related losses from discontinued operations in the third quarter of 2010.
    A footnote: There is a certain element of should-have-known-better in this story. This isn’t the first time Harley-Davidson has had a hard time with an Italian acquisition. In the 1960s it bought a stake in Aermacchi, a maker of small off-road bikes as a way to expand into new markets. Eventually it bought the whole company, but thatmove also eventually failed and Harley sold Aermacchi in the late 1970s. The sellers and buyers: the Castiglioni brothers.
    Last edited by Shovelhead; 08-19-2010 at 12:51 PM.
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  2. #2
    backslider Array K-rod's Avatar
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    at a critical lean angle
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    that could end up being a good deal or a bad deal, depending ...

  3. #3
    Moderator Array CHIA's Avatar
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    Quote Originally Posted by K-rod View Post
    that could end up being a good deal or a bad deal, depending ...
    When I asked K-rod if he had a problem with indecision, he replied, well, yes and no.
    Quote Originally Posted by G Hats View Post
    A sore ass is better than a shredded back!

    ** BIKE NIGHTS 2013 **

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    That new bike smell Array mondocycle's Avatar
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    K-Rod's weather forecast for next week: it may or may not rain.
    Log off and ride.
    Acta Virum Probant

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    Registered User Array MrCheeky's Avatar
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    Notice that they never state anywhere that there is a 50% chance of rain in the forecast. That implies that their job is basically guesswork...which it is really.

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