Piaggio and MV Agusta/Cagiva Aiming for Merger

PONTADERA, Italy (July 27) - Piaggio Holding S.p.A. announced this week that it will take a 20% stake in the increased share capital of MV Agusta Motorcycles SpA. According to a press release dated July 24, the shareholding of Piaggio in MV Agusta will create immediate financial, industrial and commercial synergies between the two Groups. Piaggio and MV Agusta highlight that the agreement will provide medium term developments towards the integration between Piaggio and MV Agusta, both of which have their technical and operational aspects currently under study. The union of these two players could allow the Group to compete at global level against the greatest international competition. The famous MV Agusta motorcycles which earned a host of 125, 350 and 500cc motorcycle racing world titles with celebrities such as Geoff Duke, John Surtees, Mike Hailwood, Phil Read and Giacomo Agostini, were sold in 1978 by the parent holding MV Agusta (helicopters) to Cagiva Motor. Headed by Claudio Castiglioni, the Schiranna (Varese) company has been marketing MV Agusta, Husqvarna and Cagiva brands since. MV Agusta has recently realized a restructuring program and updated its technology and equipment for the design and production of strategic motorcycle components. In the financial year 2000, MV Agusta produced a total of 23,000 motorcycles, making a turnover of LIT 240 billion (US$108 mn; Euro 123 mn). Founded in 1884, and controlled by Morgan Grenfell Private Equity since December 1999, Piaggio, with its head office at Pontedera (Pisa), is the leading two-wheeler manufacturer in Europe. Owning the brands Piaggio, Vespa and Gilera, 480,000 vehicles were sold last year. The turnover for the financial year 2000 was LIT 2,006 billion (US$ 907 mn; Euro 1036 mn). At the beginning of July, the Piaggio Group purchased 100% of Derbi, the Spanish manufacturing company which last year sold 60,000 models (scooters, geared and automatic vehicles) with a total turnover of 16,000 million Pesetas (US$ 92 mn; Euro 96 mn) (JO)