The Mahindra Group,->ke3932 through its subsidiaries Tech Mahindra Limited and Mahindra & Mahindra, has just finalized a deal to secure a controlling stake in Pininfarina S.p.A.,->ke69 considered as one of the most revered automotive and industrial design houses in the world. Financial aspects of the deal have yet to be disclosed, but according to a statement released by the Indian conglomerate, Tech Mahindra and M&M will receive 76.06 percent of Pininfarina shares from incumbent shareholder PincarS.r.l. at a price of € 1.1 per share. The transaction and subsequent transferring of shares will be received by “JVCo”, a joint venture company between Tech Mahindra and M&M. 60 percent of the new company will be owned by Tech Mahindra with the remaining 40 percent going to M&M.

Once the transaction is completed, an open offer for the remaining ordinary shares of Pininfarina will commence. The open offer will come at the same purchase price paid for the shares that are held by Pincar. Likewise, a rights issue to infuse funds into the company is also expected to take place by the end of 2016.

The deal to acquire controlling interest in Pininfarina may seem odd on the surface given the different markets the companies are in. But such is the case in business. We’ve seen something happen like this before and we’ll see it again. For Tech Mahindra, being in the fold allows it to tap into the iconic Italian designer’s expertise in product conceptualization, as well as its design and outfits, which is regarded as one of the best in the world. Pininfarinar’s long-standing relationships with some of the finest marquees in the auto industry also gives Tech Mahindra a new avenue to pursue in the event it decides to embark on that possibility.

Despite ceding a majority of its shares to Tech Mahindra and M&M, Pininfarina will continue to operate as its own company. It’s listing at the Milan Stock Exchange will also remain active and the company’s management team, led by chairman Paolo Pininfarina, will continue to serve in its capacity.

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Why it matters

As I said, it’s an unlikely partnership at first glance, but when you really dive deep and dissect the benefits both companies stand to get, the more it becomes clear that this is actually a really good deal for both Tech Mahindra and Pininfarina.

For Tech Mahindra, having Pininfarina in the fold allows it to expand its automotive and design businesses well past its current reach. That’s important for a company that has ambitions of becoming a bigger player in the market. It gains access to a part of the auto industry that it didn’t have before and in doing so, it can tap into Pininfarina’s long-standing presence in Europe, specifically in Italy and Germany, as well as the U.S. and Chinese markets. If the company is really serious about expanding its proverbial tentacles, this partnership with Pininfarina will go a long way in accomplishing that.

In a lot of ways, Pininfarina stands to gain the same benefits as Tech Mahindra, albeit through different means.Sure, there’s that part about expanding its own presence across 90 countries and utilizing Tech Mahindra’s global delivery model, making its products more accessible to a bigger group of people. But, there’s also the benefit of being able to utilize the Indian congolomerate’s other businesses. Think about the scale of production Pininfarina can do now and compare to what it can do with the backing of Tech Mahindra. Having a company with the financial resources to support your business could only lead to bigger and better things for the Italian design house.

I’m personally excited to see what this partnership can do in the coming years. Considering what both can bring to the table, I fully expect to see Pininfarina become a bigger presence in the automotive world. Likewise, Tech Mahindra, if it chooses to, can tap into Pininfarina’s expertise to help improve its current crop of automotive offerings. It’s a win-win scenario for both brands and from the looks of things, this partnership could be the catalyst that helps inspire a brighter future for the two sides.

Is it too early to get excited over what comes next for Mahindra and Pininfarina?