MV Agusta, Italy's legendary motorcycle maker that dominated international racing from the late Fifties to the mid-Seventies, has been bought by the Harley-Davidson group.

The deal, announced yesterday, gives the Americans total ownership of the company for only €70 million (£56 million), including debts of about €45 million.

In 2007, MV produced only 5,819 motorcycles - flashy and expensive status symbols that cost much more than their competitors without, critics say, providing particularly exciting performance.

Their added value, and what Harley-Davidson has paid for, is the prestige and mystique of the marque.

Jim Ziemer, chief executive of Harley-Davidson, said: “Motorcycles are the heart and the soul of Harley- Davidson and MV Agusta. They make great products and have a close relationship with an incredibly faithful group of customers.

“MV is synonymous with very beautiful Italian motorcycles of superior quality. The acquisition of MV Agusta will enable us to strengthen the position of Harley-Davidson as a global leader that aims to turn its clients' dreams into reality by offering them an extraordinary experience.”

Sources at the Harley-Davidson headquarters in Milwaukee said the MV would remain in its current location near Milan.

Harley-Davidson has bought the marque from the Italian Castiglioni family. The Castiglionis have been involved in ownership of several Italian motorcycle makers over the past 30 years.

MV was founded in 1907 by Count Giovanni Agusta as an aircraft manufacturer. Motorcycle production began after the Second World War, alongside that of helicopters.

From the 1950s, his son, Count Domenico, determined to build the world's fastest racing motorcycles.

Famously single-minded and authoritarian, he hired the best engineers and the best riders, including Mike Hailwood, Giacomo Agostini and Renzo Pasolini, and spared no expense thanks to his thriving helicopter business.

He succeeded, and in their classic red and silver livery the machines dominated GP racing for more than a decade. Riding MVs, Agostini won the 500cc and 350cc world championship every year from 1967 to 1973.

But after Count Domenico's death in 1971 and with increasing competition from Japan both on and off the race track, MV slid into years of decline, financial difficulties and bankruptcy.

The marque was resuscitated in the mid-90s after its purchase by Cagiva, another Italian motorcycle maker.

Harley shares fell 2.4 per cent to $32.88. A year ago they were changing hands at more than $62.

The company has recently suffered in its key domestic American market as the economic downturn has taken its toll.

It issued a profits warning last September saying that general uncertainty had prompted consumers to hold off on discretionary purchases such as its high-end motorcycles.

The most expensive Harley models can cost in excess of $20,000. In April, the company gave warning that it was cutting production and laying off staff.

Mr Ziemer said then that it was unclear how long the downturn in the company's sales would last.

Milestones

1903 William S. Harley and Arthur Davidson produce their first motorcycle

1918-1945 US military places orders in both world wars

1956 Elvis Presley poses on a Harley-Davidson

1983 Harley- Davidson wins protection from Japanese imports

2003 More than 250,000 people at Milwaukee for Harley-Davidson 100th anniversary

April 2008 Harley profit warning

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