Cycle News - Archive Issues - 2000's

C'audio Castig'ioni By ALAN CATHCART PHOTOS BY KYOICHI NAKAMURA ((U. laudio Castiglioni has reason to be pleased with ~ himself. After drawn-out negotiations in what were doubtless a succession of smoke-filled rooms, the 54-year-old owner of MV Agusta - the company formerly known as Cagiva, embracing also the Husqvarna off-road brand - has succeeded in concluding a deal with the Piaggio scooter giant announced at the beginning of September to join the two companies together - a move that brings immediate benefits for both parties. For MV, the injection of new capital allowed the cash-strapped company to kickstart production of its backordered F4 and overdue Brutale models, while for Piaggio - now aD-percent owned since October 1999 by the London-based equity house Deutsche Bank Morgen Grenfell, with lO-percent of the stock held by American venture capitalists TPG, for whom DBMG were the junior partner three years earlier in taking over Ducati - the link with MV Agusta marked a significant step forward in building a fifth force in world motorcycling, with a complete range of products marketed under its various brands. Thus, while Piaggio will concentrate on PTW products of all types and capacities, including those marketed under the historic Vespa label, its newly acquired Derbi brand will focus on small-capacity motorcycles, especially supermoto and endurostyle models, and Gilera will deliver volume-production sportbikes and naked models, including Monster-style V-twin streetrods, the addition of MV 16 DECEMBER 12.2001 • cue I • Agusta gives the group a prestige range-topping sporting product line, while Husqvarna takes care of the off-road market. The two companies appear made for each other, in terms of blending together with relatively little crossover confusion between products. The chance to learn more about the deal from Claudio Castiglioni himself came at his lakeside factory near Varese, where the constant flow of trucks and workers across he factory yard outside his office window, which on a previous visit just two months previously had been very quiet, underlined its benefits. What is the basis for your agreement with Piaggio? It's the first time that two leading European motorcycle manufacturers have merged together, and from a mental standpoint, this was very difficult. Every company has its own distinct mindset, its own philosophy, its own modus operandi - and Piaggio and MV Agusta perhaps represent two polar extremes in terms of operation. But having at this stage completed a 20-percent marriage, with the intention of completing a full merger very shortly, we have now realized that there are greater potential synergies than we had foreseen at the outset greater benefits in combining together in the areas of R&D and product development, of overall production, of component supply, of sales and marketing, and of management. This will result in the creation of a group with the potential not to compete with the Japanese on their territory, but to become a major force in world motorcycling in its own right. neVlls Was this a marriage born out of necessity on your part? The sporadic nature of MV Agusta production in the past year owing to lack of parts because suppliers hadn't been paid conveys a sense of crisis. When people talk about a crisis at MV Agusta, they don't realize that what we have been suffering are growing pains. What we have achieved in the past five years is incredible - taking a glorious marque which had been dead for 32 years and breathing new life into it. This isn't a crisis - it's a miracle. But in order to take MV Agusta to the next stage, we required a financial partner with the resources to help us grow still further. We had many potential candidates from the business world who wanted to invest in MV Agusta, keep it independent, and then float it on the stock market three or four years down the line. But I wanted to look further ahead than that, because I believe it will become a requirement within the motorcycle industry for other companies to merge together, just as is happening in the automobile world, in banking, in insurance, in aviation, in so many other industries - it's a fresh way of doing business, which brings benefits for both the companies concerned, and their customers. Look at the agreement between Kawasaki and Suzuki, which has been concluded at the same time as our discussions with Piaggio, making us the first European group to take this step. So, in the end we chose a partner with both industrial and financial strengths, which provided the ideal solution to the company's needs, even if from a personal point of view, it was less favorable for me personally,

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