Harley-Davidson Completes Acquisition Of MV Agusta - Web Exclusive

s previously reported on July 11, 2008, Harley-Davidson announced that it was acquiring Italian motorcycle manufacturer MV Agusta. That purchase has now been completed for $39 million (25 million euros) plus the assumption of another $69 million (45 million euros) of debt. H-D already has a solid presence in Europe but this acquisition further consolidates their position and diversifies their market into the high-performance sportbike arena.

This is actually The Motor Co.'s second foray into ownership of an Italian company. In 1960, H-D acquired 50% of Aermacchi, with the other 50% purchased in 1974. Aermacchi motorcycles, with two-stroke engines displacing between 125cc and 350cc, we're rebadged and sold as Harley-Davidsons. H-D even won the 250cc GP World Championship with those bikes with racer Walter Villa in 1974, 1975 and 1976. H-D, under the control of AMF, sold Aermacchi to Cagiva in 1978.

We're not sure how things will play out but we are pretty certain that there won't be any V-twin sportbikes or inline-four cruisers coming anytime soon, and probably never. We also don't see any change to the storied MV Agusta name, with its long and illustrious heritage of racing success and top-quality workmanship. Similarly, we don't expect to see any Harley-badged sportbikes as that would conflict with their positioning of Buell as a sport brand. But an inline-four Buell?
The official press release follows:

HARLEY-DAVIDSON COMPLETES ACQUISITION OF MV AGUSTA
Company Expands European Presence with Premium Italian Motorcycle Company
Milwaukee, Wis., Aug. 8, 2008 --
Harley-Davidson, Inc. (NYSE: HOG) today announced the completion of its purchase of the privately-held Italian motorcycle maker MV Agusta Group. The Company has acquired 100 percent of MV Agusta Group shares for total consideration of approximately 70 million euros ($108 million), which includes the satisfaction of existing bank debt for approximately 45 million euros ($69 million).

"We are thrilled to welcome the MV Agusta family of customers and employees into the Harley-Davidson family of premium motorcycle brands," said Harley-Davidson, Inc. Chief Executive Officer Jim Ziemer. "Our primary focus with this acquisition is to grow our presence and enhance our position in Europe as a leader in fulfilling customers' dreams, complementing the Harley-Davidson and Buell motorcycle families," Ziemer said.

Retail sales of Harley-Davidson motorcycles have grown at a double-digit rate in Europe in each of the last three years, as the Company has increased its strategic focus on global markets.

MV Agusta Group adds two lines of motorcycles to the Harley-Davidson, Inc. family: a line of exclusive, premium, high-performance sport motorcycles sold under the MV Agusta brand; and a line of lightweight sport motorcycles sold under the Cagiva brand. MV Agusta's F4-R motorcycle, powered by a 1078cc in-line four-cylinder liquid cooled engine, is rated at 190 hp.

In conjunction with finalizing the acquisition, Harley-Davidson has named Matt Levatich as Managing Director of MV Agusta Group. Levatich, 43, joined Harley-Davidson in 1994 and has served in a variety of roles, including significant positions in Harley-Davidson Europe sales and marketing, based in England. He headed Harley-Davidson materials management as Vice President for four years and most recently was Vice President and General Manager of Parts and Accessories and Custom Vehicle Operations.