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GE may seek Piaggio stake
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August 20, 1999: 10:01 a.m. ET
U.S. company reportedly has offered to take 30% stake in Italian scooter maker
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LONDON (CNNfn) - General Electric has offered to buy a 30 percent stake in Italy's Piaggio, maker of the famed Vespa motor scooter and, more recently, the touted target of another U.S. suitor, Texas Pacific Group, according to a published report in an Italian newspaper.
GE's financial arm, General Electric Capital, sent a letter to Piaggio at the end of July proposing to buy the stake and to support Piaggio's business strategy, Italy's Il Sole 24 Ore, a leading business and economic journal, reported Friday.
The letter reportedly outlined GE's proposals to collaborate with Piaggio on distribution, research and development, and cost control.
The report of GE's proposal comes a day after another prominent Italian newspaper, Corriere della Serra, cited banking sources in reporting that U.S. fund Texas Pacific was in talks with Piaggio to buy 100 percent of the business for 1.2 trillion lire ($650 million).
Texas Pacific salvaged the prominent motorcycle maker Ducati from the brink of bankruptcy in 1996 and also has stakes in Continental Airlines and Virgin Entertainment.
Piaggio, with consolidated sales last year of 1.850 trillion lire ($1.01 billion), is Europe's leading scooter manufacturer, with a 32 percent market share. The company, which returned to profit in 1998, has a 39 percent share of the Italian market.
The Agnelli family, which controls Italian carmaker Fiat, also holds a majority stake in Piaggio.
Italy's Il Sole quoted GE Capital's Italy chief, Luca Giacometti, as saying General Electric also would seek a separate stock-market listing for Piaggio.
"Piaggio is without doubt an interesting company and we want to play a definite role encouraging development of products and a wider presence in the key markets," the newspaper quoted Giacometti as saying.
A General Electric spokesman at the company's headquarters in the United States didn't immediately return a phone call Friday.
Piaggio couldn't be reached for comment.
-- from staff and wire reports
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