The agreement will be finalised over the coming weeks provides for the subscription by Piaggio Holding SpA to a capital increase in MV Agusta SpA equal to 20-percent of the equity stake.

Piaggio entering the capital of MV Agusta signifies that immediate financial, industrial and commercial synergies will be developed by the two Groups, both strong in their brands of extraordinary prestige and fame worldwide that identify with the motorcycle history regarding style, technology, innovation and top racing commitment.

Besides, both parties acknowledge that the agreement may foresee further developments at medium term in the integration between Piaggio and MV Agusta, of which technical and operational aspects are under study. The know-how in the diverse sectors and the historical and experimental inheritance that Piaggio as well as MV Agusta are proud of, represent indeed a point of reference on a world level and could allow to the Group stemming from the union of the two industrial realities to compete on a global level with the best international competition.

MV Agusta, with its head office in Schiranna (Varese) and Claudio Castiglioni as its chairman, was established in 1978 to manufacture motorcycles under the name of Cagiva Motor that was subsequently changed into MV Agusta. Presently, it stands for one of the most important European motorcycle reality thanks not only to the manufactured brands (MV Agusta, Husqvarna, Cagiva) but also to the constant and deliberate commitment to design avant-garde bikes, summaries of technical and stylistic innovations.

MV Agusta has recently launched a program to re-organize the production systems and update the technologies and equipment needed for the design and production of the most important strategic motorcycle components. The brands manufactured by MV Agusta can claim 37 Manufacturer World Championships, 39 Rider's World Championships and 270 Grand Prix victories; 64 are the world titles Riders/Manufacturers that Husqvarna won in the all-terrain racing activity.

In the 2000 financial year, MV Agusta produced 23,000 motorcycles, resulting in an overall turnover of 240-billion Lire ($A216,021,602).

Founded in 1884 and since December 1999 controlled by Morgan Grenfell Private Equity, Piaggio (President Dante Razzano, Managing Director Stefano Rosselli Del Turco), with its headquarters in Pontedera (Pisa), is the leading Group in the two-wheeled European market with more than 480,000 vehicles sold last year under the brands Piaggio, Vespa and Gilera. The Group's sales in the 2000 financial year amount to 2,006-billion Lire ($A1,854,185,418).

At the beginning of July, the Piaggio Group finally tied up the acquisition process of 10-percent of Derbi, the historical Spanish manufacturing company founded in 1922, located at Martorelles (Barcelona) that in the year 2000 sold 60,000 units (scooters, vehicles with gears, automatic vehicles) with total sales of 16,000-million Pesetas ($A1,673,465,118).

Here are Dante Razzano's comments, President of the Piaggio Group, expressed after the agreement:

"The European manufacturers have at their disposal an unequalled patrimony of innovative know-how, technology and style. MV Agusta, with its products and the titles-list held by its brands MV, Husqvarna and Cagiva, is the flagship of the industry and the Italian motorcycle world. The agreement arrived at today is in complete accord with Piaggio’s strategy to deliberately be an active part of any industrial synergy, and of any possible initiative of integration, that may enhance the European competitiveness and hence creating a critical mass such that will render us competitive with respect to our global contenders."

"The agreement with MV Agusta, further to representing the first step towards a possible further integration of the two companies will allow from now on to put together two important and perfectly complementary and functional experiences in order to launch successful enterprises".

Claudio Castiglioni, President of MV Agusta, said: "The entry of Piaggio in the capital of MV Agusta represents both a recognition and a starting point. The recognition goes to a group of people, Massimo Tamburini, Miguel Galuzzi, Ampelio Macchi and all their assistants, who like me are spurred by the passion for motorcycles and able to create products which are so innovative, unique and beautiful that they represent the real and only 'state of the art' of the Italian and European motorcycle. The starting point is the challenge to integrate this pool of extraordinary know-how into a leading Group such as Piaggio that also unfolds a great history, can claim an exceptional industrial and commercial strength, unique management skills and at the same time great inventors of unique solutions in the realm of light vehicles”.

The Paul Feeney Group, Australian distributors of MV Agusta and Cagiva motorcycles, believes its operations will benefit greatly from the equity stakeholding of the Piaggio Group.

Group Managing Director Paul Feeney said today he expected there would be a resulting increase in stock available of models currently being imported into Australia, and a flow of new MV Agusta and Cagiva products.

"The additional resources of the Piaggio Group will help us bring even more MV Agusta and Cagiva bikes into Australia, and a wider range of new models," he said. "This is fantastic news and I'm sure it will provide more impetus for future growth."

Models currently imported by the Group include the MV Agusta F4, and in the Cagiva range, the Raptor 1000, V-Raptor 1000, Navigator 1000, and Mito 125. The first shipment of Raptor 650 models into Australia arrive later this week.

Feeney said he expected the Piaggio Group stakeholding would assist the Group's desire to soon have available in Australia the MV Agusta Brutale, SPR, and Senna, models, and the Cagiva V-Raptor 650 and Planet 125.

"We have had the Brutale and the Senna on display in Australia this year, and the interest they generated indicated they will be popular in the market-place once we can get them here to sell," said Feeney.

This year the Group has expanded its number of Australia-wide authorised MV Agusta and Cagiva dealers to 20 in all States, plus in the A.C.T. and the Northern Territory. Recent newcomers are Mat Mladin Motorcycles in Narellan on the outskirts of Sydney, and North Queensland-based dealers Euro Motorcycles in Townsville and Cairns Motorcycles.