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Harley-Davidson Inc said on Friday it agreed to buy Italian motorcycle maker MV Agusta Group for 70 million euros ($109 million), including the assumption of about 45 million euros ($70 million) of debt.
The company said it was aiming to boost its presence in Europe, where retail sales have grown by double digits in each of the last three years. The deal, which is expected to close in several weeks, also calls for potential future payments based on performance, Harley said.
Varese, Italy-based MV Agusta sells its motorcycles through a network of about 500 dealers, mostly in Europe.
The goal of the deal may be to bring sports-oriented products to market since the sport bike market is quite different from Harley's heavyweight cruiser segment, allowing it to pursue younger riders, UBS analyst Robin Farley said in a research note.
"We believe this transaction could be neutral to possibly slightly dilutive to Harley earnings near-term as we believe MV Agusta operates at a loss," Farley wrote.
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