Magna International Inc. is in discussions to acquire Italian contract auto manufacturer and design house Pininfarina SpA.

Trading in the Italian company’s shares was halted on the Milan Exchange after rising more than 12 per cent after reports of the discussions appeared first in Automotive News Europe.

The 80-year-old Italian company, founded by the Farina family that later changed its name to Pininfarina by presidential decree, has fallen on hard times since the days when it designed such sports cars as the Alfa Romeo Spider, the Ferrari Testarossa and less successful cars such as the Cadillac Allante in the 1980s.

A deal would enhance Magna’s position as the largest manufacturer of vehicles on contract for the world’s auto makers through its MagnaSteyr assembly operation in Graz, Austria. A deal would also strengthen Magna’s design and engineering expertise.

Magna spokespeople would not comment on the discussions.

But Bloomberg News quoted Dieter Althaus, a vice-president of Magna’s European operations, as saying the acquisition “would earn us additional competence on development matters.”

Pininfarina's second-quarter financial results included the statement that: "As it is well known, Pininfarina S.p.A. is in the process of being sold ..."