Milwaukee-based Harley-Davidson Inc. sold its subsidiary, MV Agusta, to Claudio Castiglioni and his wholly owned holding company, MV Agusta Motor Holding, S.r.l., late last week. According to documents filed late Monday with the U.S. Securities and Exchange Commission, Harley was paid two Euro, or one U.S. dollar, for the company .
According to terms of the deal, Harley also has provided MV Agusta with 20 million Euro in operational financing.
Castiglioni is the former owner of MV Agusta, an Italian motorcycle manufacturer, and has served as MV Agusta’s chairman since 2008, when Harley-Davidson acquired the company. Harley paid $109 million in July of 2008 to purchase MV Agusta, and assumed $70 million of the company’s debt.
In exchange for buying MV Agusta for one dollar, Castiglioni has waived his rights to certain earn-outs that were provided for under the terms of Harley’s 2008 purchase of the Italian company.
Harley has written down a total of $162.6 million in losses related to MV Agusta, according to the SEC filing, including $61.5 million in the second quarter of this year. The company anticipates additional limited write-downs related to the Italian company in the third quarter, it says in the filing.
In October, Harley announced its intention to sell MV Agusta as part of a new corporate strategy to focus resources on the core Harley-Davidson brand. Since then, Harley-Davidson has held discussions with various potential MV Agusta buyers.
"MV Agusta is a proud brand and we wish Mr. Castiglioni and the company’s employees well," said Harley-Davidson president and CEO Keith Wandell. "Our decision to divest MV Agusta reflects our strategy to focus our efforts and our investment on the Harley-Davidson brand, as we believe this provides an optimal path to long-term growth."
