While MV Agusta may be vaguely familiar to some and going by sales numbers, loved by a smaller number of others, everyone should know its motorcycle history. Seriously, it should be required biker-reading. Riding one twisty after another the Italian manufacturer’s story of being bought and sold is beyond compare and a recently filed ‘business continuity plan’ only adds another sharp curve to its corporate journey.
Before reporting on the latest news, a quick review of what brought MV Agusta to where we are today.
The Back Story
Originally called Meccanica Verghera Agusta, the motorcycle manufacturer began on 12 February 1945 as an offshoot of the Agusta aviation company formed by Count Giovanni Agusta. Indeed, the motorcycle company was formed at the end of the Second World War as a means of saving the jobs of employees of the Agusta firm hoping to fill the post-war need for cheap, efficient transportation.
Fun fact, the acronym MV stands for Meccanica (mechanics) Verghera, the hamlet where the first MVs were made.
The company manufactured small-displacement, café racer-style motorcycles, mostly 125 to 150 cc, through the 1950s and 1960s. As with other motorcycle manufacturers, their engine displacement grew to not only be competitive but also answer the growing demand for more powerful bikes.
Although MV Agusta enjoyed decades of world racing titles, the death of a founding member in 1971 caused the company to eventually seek public financing. Part of the financial agreement required MV Agusta leave the motorcycle industry with the last motorcycle being sold out of storage in 1980.
Some eleven years later another Italian motorcycle manufacturer, Caviga bought the MV Agusta trademarks and by 1997, produced a four-cylinder 750 cc motorcycle calling it the F4. Including a series of limited production run models, such as the all black paint work SPR model (Special Production Racing) which was featured in the movie I, Robot, this was the new MV Agusta.
And things were about to get strange.
Heavily in debt, the manufacturer was bought by Malaysian car maker Proton in December 2004 for €70 million. By December 2005, Proton sold MV Agusta to GEVI SpA, a Genoa-based financing company related to Carige, for a token one euro excluding debt.
By 2006 MV Agusta was ready to continue producing motorcycles in its native Italy. But all was not well with the motorcycle manufacturer. At this time, the world was in love with the American cruiser allowing manufacturers who made them to enjoy record-breaking sales. One such manufacturer wanted to diversify its motorcycle line up and was looking for a way into European markets, Harley-Davidson acquired MV Agusta Group for $109 million US Dollars in 2008.
However, a world recession quickly started ebbing away at motorcycle sales leading to a troubled Harley-Davidson cutting two of its motorcycle lines, Buell and MV Agusta, a year after they bought the latter. The Milwaukee manufacturer essentially paid the old owners of MV Agusta to take back the company, selling it for the grand sum of $3.98 and putting $26 million in an escrow account to be used as operating capital for the following 12 months.
That’s correct, they sold it for less than four dollars.
Ironically, MV Agusta announced that for the first three months of 2010 bike sales increased by 50%.
MV Agusta F4 SPR #3
On October 31, 2014, Mercedes-AMG announced a long term partnership with the motorcycle brand and the acquisition of a 25% minority stake which not only brought needed financial backing but also brings us to the latest wrinkle.
Whether from the recent investment by Mercedes-AMG, MV Agusta states it’s enjoying unprecedented success with sales at a 30% growth rate compared to the industry rate of 12%. They claim they have ‘invested 15% of its sales in Research & Development, to enter new segments and ensure undisputed excellence in terms of quality and performance standards that fans expect from this brand’.
The fly in the ointment is Mercedes-AMG who have suggested they would like to gain control of a yet unspecified majority in MV Agusta and most likely apply some measures to make the company profitable. What those measures look like is unclear, but what is apparent is the current majority ownership, the Castiglioni family is not exactly keen to lose control over MV Agusta.
This brings the story to the recent filing of the ‘business continuity plan’ or an agreement to ensure the company can keep on operating at their own pace and pay the debt created from Mercedes-AMG’s investment when they feel is best.
This is the point of the released document, MV Agusta feels with sales going as they are and with the company running as it is everything should be left exactly how it currently stands and everyone will be paid back accordingly.
Is it enough to convince MV Agusta’s creditors is the real question.
If anyone can manage the high world of corporate financing, it would the Castiglioni family. They owned 95% of MV Agusta when Harley bought the company for $109 Million in 2008. Although $70 million of that went to pay off existing debts, the Castiglioni family not only enjoyed a large pay out but were paid to take the company back some twelve months later.
Only in the world of motorcycles.