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Polaris Considering Majority Stake in MV Agusta

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Highlights

  • MV Agusta CEO confirms discussions with Polaris
  • MV Agusta facing liquidity crunch despite 30 per cent rise in sales
  • Polaris owns Indian Motorcycles and Victory Motorcycles

MV Agusta President and CEO, Giovanni Castiglioni has confirmed that he is in talks with Polaris over the acquisition of a majority stake in the legendary Italian motorcycle brand. MV Agusta has been going through difficult financial times over the past few years.

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"We've been in discussions with them about some sort of partnership, just as with other companies interested in investing in the commercially successful brand that is MV Agusta. But we absolutely have not made any agreement with Polaris at this stage, even in draft form," Castiglioni told Cycle News.

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If at all those talks lead to something worthwhile, Polaris could pick up a substantial share in MV Agusta. Polaris already owns cruiser brands - Indian Motorcycles and Victory - and in January this year, Polaris also acquired Brammo's electric motorcycle division. Acquiring a controlling share in the Italian brand gives Polaris an opportunity to branch out of pure cruiser and touring motorcycles to the hi-performance sportbike and sport touring market.

MV Agusta has been reeling under a liquidity crunch in recent times, and the company has already chalked out plans to reduce expenses. Production is expected to be cut down to around 5,700 units from 9,000 units. The Italian motorcycle manufacturer sold more than 9,000 bikes globally in 2015, racking up impressive 30 per cent sales growth and profit also increased by 40 per cent.

However, the company is still reeling under debts, estimated to be around 40-50 million Euros. In 2014, Mercedes-AMG acquired a 25 per cent stake in MV Agusta for 67 million Euros. But that partnership isn't going well and Castiglioni is keen to buy back the Mercedes-AMG stake but is unable to do so due to financial constraints.

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Previous relationships between MV Agusta and other brands have sometimes ended abruptly. Harley-Davidson owned MV Agusta for a short period of time, but sold it back to the Castiglioni family in 2010. A more recent investment by Mercedes-AMG has been described as nothing short of a disaster. Now, it remains to be seen, if Polaris actually takes a majority stake in MV Agusta and where that leads to.

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1 Comment(s)
Thanks for the comments.
  • Tim Erickson 2 years ago
    Polaris did not acquire Victory as the subhead implies - Victory was a Polaris start up that was launched in 1998.