Harley-Davidson announced on Friday that it had agreed to buy the Italian motorcycling company MV Agusta for some 70 million euros.
The American motorcycling giant said the acquisition would allow it to expand in Europe, where Harley-Davidson sales last year climbed 15%.
MV Agusta, which also produces motorbikes under the Cagiva marque, is owned by the Castiglioni family and Claudio Castiglioni will remain as company chairman.
Harley-Davidson has agreed to pay him an additional contingent bonus if certain financial targets are met by 2016.
Harley-Davidson said it planned to continue to operate MV Agusta Group from its headquarters in Varese, northern Italy, and that head designer Massimo Tamburini would also stay on.
''Motorcycles are the heart, soul and passion of Harley-Davidson and MV Agusta,'' said Harley-Davidson CEO Jim Ziemer in a statement on Friday. ''Both have great products and close connections with incredibly devoted customers. The MV Agusta and Cagiva brands are well-known and highly regarded in Europe. They are synonymous with beautiful, premium, Italian performance motorcycles,'' he added.
''We take enormous pride in MV Agusta and Cagiva motorcycles,'' said Castiglioni. ''Our riders seek an uncompromising experience in premium performance motorcycles. And with Harley-Davidson's deep understanding of the emotional as well as the business side of motorcycling, I have great confidence that our motorcycles will excite customers for generations to come,'' he added. According to Ziemer, the acquisition is primarily intended to expand Harley-Davidson presence in Europe.
In its statement, Harley-Davidson said the acquisition was expected to take in several weeks, pending the satisfaction of contingencies and receipt of regulatory approvals. Harley-Davidson intends to fund the transaction, which includes acquiring MV Agusta's 45 million euros debt, primarily through euro-denominated bond.
MV Agusta was founded in 1945 as an offshoot of the Agusta aviation company. Despite its success in Grand Prix racing, sales declined in the 1970s and the company stopped production in 1980.
Cagiva bought the MV Agusta marque in 1991 and in 1997 introduced a new line of models. In 1999 the Cagiva group was restructured with MV Agusta becoming the main brand. MV Agusta produces a line of exclusive, premium, high-performance sport motorcycles while Cagiva makes lightweight motorcycles.
