Mahindra & Mahindra, India's largest SUV maker, is in the final stages to buy Pininfarina.

Mahindra & Mahindra, India's largest maker of SUVs, is in the final stages of negotiations to buy Italian design and engineering firm Pininfarina, according to people familiar with the matter.

Mahindra may reach an agreement to purchase the company that has designed some of the most iconic Ferrari sports cars as early as next week, said the people, who asked not to be identified because the discussions are private.

Representatives for Mahindra and Pininfarina declined to comment.

While other potential bidders have expressed interest in buying the Turin-based creator of the Ferrari California T roadster, Mahindra is favored by the Pininfarina family and its creditor banks because the Indian company is seen as providing stability through its position in the auto industry, the people said.

Negotiations are continuing and could still fall apart, the people said.

Pininfarina was founded in 1930 and has designed automotive classics such as the Ferrari 250 GT and Alfa Romeo Giulietta Spider from the 1950s.

The company has been unprofitable for 10 of the past 11 years while struggling with debt and a floundering division that built cars for other manufacturers, a business it shut three years ago.

Pininfarina would be the latest Italian company to be purchased by a foreign buyer as the country struggles to emerge from a cycle of recessions.

Owner's review

Pininfarina's controlling shareholder, Pincar Srl, confirmed Mumbai-based Mahindra's interest on March 26. The Pininfarina family's investment vehicle said it has been reviewing several options for the design firm jointly with its financial institutions.

Pincar, which owns about 76 percent of Pininfarina's stock, ceded control of the stake to banks as a guarantee for debt restructuring in 2012. Those creditors also need to approve any sale.

Pininfarina shares have gained about 35 percent since Bloomberg reported on March 25 the talks with Mahindra. The stock was trading Wednesday at 5.73 euros, valuing the company at 168 million euros ($179 million).

The designer already cooperates with Mahindra on SUV development and worked with it on the Halo electric sports car concept presented at the Delhi auto show last year.

Pininfarina could help Mahindra add flair to the Indian manufacturer's namesake brand and its South Korean car making unit SsangYong, which also specializes in SUVs.

Other models that Pininfarina has designed include the Rolls-Royce Camargue, Cadillac Allante and Maserati Quattroporte.

The company has branched out to non-automotive design projects, including residential apartment towers, vending machines and toothbrushes.

Mahindra, which bought controlling stakes in SsangYong in 2011 and PSA/Peugeot-Citroen's scooter unit earlier this year, had 82.6 billion rupees ($1.3 billion) in cash and short-term investments at the end of its fiscal year on March 31, 2014, according to data compiled by Bloomberg. The manufacturer is scheduled to release fiscal 2015 earnings figures in May.