THE German sportscar and performance brand Mercedes-AMG, part of the Daimler Group, and motorcycle manufacturer MV Agusta have signed a long-term sales and marketing cooperation agreement.
At a time when Harley-Davidson itself continues to be the subject of takeover rumors, Daimler's investment in the former Harley subsidiary will benefit from the hundreds of millions of dollars that Milwaukee spent on buying MV Agusta and then funding new production and new model investment before selling it on for a fraction of its spend in 2010.
Harley bought MV Agusta in July 2011 for a reported $109 million in a deal that included $70 million in assumed debt.
Harley announced its intention to sell MV Agusta at the same time that it decided to close its Buell subsidiary, in October 2009, with the recession taking its toll on investor sentiment Harley-Davidson ended up selling MV Agusta back to the Italian owners it had bought it from for a notional €3/$4 deal - and in fact paid the prior owners to take it off their hands by putting $26 million on escrow to provide the Italian company with access to operating capital for 12 months.
Although the creativity of the Motor Company's accounting practices are adept at camouflaging negative financial impact whilst still maximizing write-down benefits, making it difficult to be certain how much the total net cost of MV Agusta ownership has been for Harley, it is widely thought to have had an impact well north of $200 million, with some estimates putting it as high as $350 million.
Mercedes-AMG will appoint one member of MV Agusta’s Board of Directors; regulatory approval for the deal is expected to be granted in late November.
Giovanni Castiglioni, President and CEO of MV Agusta Motor S.p.A., commented: “MV Agusta and Mercedes-AMG are a perfect brand fit: two complementary companies that stand for design, high performance and excellence. Mercedes-AMG will help MV Agusta to further expand globally and to accelerate our growth. The uniqueness of MV Agusta will further enhance Mercedes-AMG’s leadership in the high-performance segment."
Wilko Stark, Vice President Daimler Strategy & Mercedes-Benz Cars Product Strategy and Planning said: “The positioning of Mercedes-AMG as the performance brand in the Mercedes-Benz product portfolio will be further strengthened through the strategic partnership with MV Agusta. Through sales and marketing cooperation and demographic synergies, we will be able to attract new target groups for both companies all over the world."
