In a somewhat surprise move, Harley-Davidson has purchased Italian boutique brand MV Agusta, with a formal announcement in July followed by the completion of the takeover in August. MV Agusta had been in serious financial straights, starting with Proton (the Malaysian car manufacturer that sponsored Kenny Roberts' GP team for many years) selling the majority stake of MV it had acquired back in November 2004 for the nominal fee of one Euro to GEVI SpA just over a year later in exchange for the Italian investment firm assuming responsibility for MV's then-107 million ($133 million) outstanding debt. In July of 2007, MV president Claudio Castiglioni engineered the sale of his company's Husqvarna dirtbike subsidiary to BMW for 92 million ($127 million), of which 50 percent he had hoped was to be reinvested into MV in exchange for his handling the negotiations. Unfortunately, GEVI instead pocketed the entire proceeds of the sale, leaving MV with no cash to pay its parts suppliers, which in turn forced the shutdown of all production lines at the company until a savior could be found.
That American savior now owns 100 percent of MV Agusta Group shares for a total consideration of 70 million ($108 million), part of which includes satisfaction of existing bank debt for approximately 45 million ($69 million). Matt Levatich, a member of Harley's management team since 1994, has been named as Managing Director of the MV Agusta Group. Current plans are for Castiglioni to remain on as chairman of the board, as well as managing R&D and racing efforts; famed designer Massimo Tamburini has been contracted to stay in the fold as well.
In an interesting twist of fate, Harley actually used to own the main factory in Varese, Italy, where MVs are assembled; back in the early 60s, the company was known as Aermacchi, and produced small-displacement two-strokes that Harley market-badged in the USA to compete against the increasing flood of Japanese competitors. In fact, H-D actually won four 250cc/350cc World Grand Prix championships using Aermacchi-built machines in 1974-76. Unfortunately, the growing Japanese dominance of the market forced Harley's then-owner AMF to close the factory in 1978. That was when Castiglioni and his brother stepped in to acquire the company and rename it Cagiva, leading to a long and storied saga that nearly ended in tears until H-D stepped in.
It's easy to see that the main thrust of the acquisition will be to expand Harley's market in Europe by utilizing the MV dealer network. H-D sales in the US have been declining in double-digit figures for the past two years, while sales of the American icon have been skyrocketing overseas. And with the dollar's very weak value against the Euro and other foreign currencies, the price of Harleys will be even more appealing to export market buyers.
Hopefully H-D will continue funding for new models waiting to be finished in the MV pipeline. These include a new single-cylinder engine that will initially be used in both an enduro and supermoto machine (although many are hoping for a resurrection of a road-going sport model in the vein of the Ducati Supermono), and a 675cc three-cylinder F3 middleweight-both engines will use the radial valve arrangement from the F4. And it would be great to see what Eraldo Ferracci could do with proper funding and R&D support in AMA superbike racing. -K.K.