Harley Davidson buys MV Augusta

MILWAUKEE — Harley-Davidson signed an agreement to buy the Italian high-performance-motorcycle maker MV Agusta. The agreement is set to become final in "several weeks," Harley-Davidson said, and will see the legendary U.S. company take a full 100 percent ownership of the privately held MV Agusta Group. The purchase is part of Harley's strategy to expand in Europe.

Harley is paying the equivalent of $109 million; part of the deal is a $70 million payment to satisfy existing bank debt, and there is an additional "contingent payment" based on meeting financial targets. That is set up to be made in 2016 to Claudio Castiglioni, MV Agusta CEO and head of the family that currently owns 95 percent of the Italian company.

MV Agusta produces high-end, high-performance sport motorcycles under the MV Agusta brand and lightweight bikes under the Cagiva brand name. The company has a network of 500 dealers, most of which are in Europe, and sold 5,819 motorcycles in 2007 — but considerably fewer this year so far because of financial problems, Harley-Davidson said.

Harley-Davidson CEO Jim Ziemer said the deal makes sense from his point of view because the two companies "both have great products and close connections with incredibly devoted customers." Castiglioni, for his part, praised "Harley-Davidson's deep understanding of the emotional as well as the business side of motorcycling."

Harley-Davidson will name a new "leadership team" that will continue to run MV Agusta Group from its Varese, Italy, headquarters, keeping chairman Castiglioni and design chief Massimo Tamburini on in their current positions.