Magna interested in Italian design specialist Pininfarina

Article by Christian A., on November 19, 2010

Three sources told Automotive News Europe that Magna International Inc. is considering a proposal to buy Italian design specialist Pininfarina S.p.A. According to Pininfarina's quarterly earnings report released earlier this month, the company could be sold as soon as Dec. 31. However, the Canadian-Austrian parts supplier and Pininfarina declined to discuss the potential sale.

A source said that Magna is seeking to boost its position as a global supplier of design, engineering and contract manufacturing. Pininfarina's design expertise and engineering know-how are expected to expand the range of services offered by Magna subsidiary Magna Steyr, which has engineers that will complete vehicles and builds cars for many automakers at its assembly plant in Graz, Austria.

Magna had attempted to gain control of Aston Martin from Ford Motor Co. and last year, a consortium led by Magna expected to acquire Opel/Vauxhall from General Motors Co. These two strategies both failed. With the Opel defeat, Magna had chosen to stop pursuing automakers and to concentrate on its core business of supplying parts and services, as well as contract manufacturing.

Pininfarina, which is famous for its legendary sport cars such as the 1966 Alfa Romeo Spider and the 1984 Ferrari Testarossa, had struggled financially for years. It had lost a combined 358 million euros from 2007 to 2009. In August 2009, Pininfarina got the services of Banca Leonardo, a Milan-based merchant bank, to sell a 50.7% stake held by Pincar, the Pininfarina family holding company.

The sale is part of a debt agreement made at the end of 2008 with creditor banks, which canceled 180 million euros in loans as part of the agreement. The proceeds from the sale of the stake will go to the banks. The stake had increased to 76.1% late last year after the banks canceled another 70 million euros in loans. [via autonews - sub. required]

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