Indian conglomerate Mahindra Group has purchased 76.06 percent stake in Italian automobile design firm Pininfarnia in a deal worth $185 million. The investment is a joint-venture between Tech Mahindra and Mahindra & Mahindra- both subsidiaries of the Mahindra Group.

The two companies are paying $1.2 for each share of Pininfarnia which means they will pay a cumulative total of $28.1 million for all the shares. Apart from that, Mahindra has assured the creditors of $125 million and it will also pump in $21.8 million as fresh capital.

“The legendary high-end design credentials of Pininfarina will significantly enhance the design capabilities of the entire Mahindra Group,” stated Mahindra’s Chairman Anand Mahindra.

Mahindra is a leader in the commercial vehicle segment in India and owns South Korean car manufacturer SsangYong and PSA Peugeot Citroen motorbike unit. It also tried to purchase Saab in 2012 but was outbid by National Electric Vehicle Sweden. Pininfarnia’s deal will help the company expand its presence in the global automotive industry. That said, Tech Mahindra’s shares fell by four percent within 48 hours of the announcement of the deal, with investors a bit apprehensive regarding how Pininfarnia will fare.

The Turin-based coachmaker was founded in 1930 and has worked with Ferrari, Maserati, Rolls-Royce and BMW in the past. Some of the recent production cars designed by Pininfarnia include Ferrari California T, Ferrari 458 Italia, Maserati GranTurismo and Maserati Quattroporte. Before the LaFerrari, Pininfarnia had designed all of Ferrari’s vehicles since 1978. However, the company has failed to make a profit in 10 of the last 11 years and its workforce has shrinked from nearly 2,800 employees to 650 in the last nine years. Till end-June, it had a debt of $57.5 million.

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