Harley-Davidson bids to acquire Ducati

Harley-Davidson Motorcycles has reportedly entered the race to take over Ducati from Volkswagen AG.

Following the humongous fines and legal settlements due to the emission scandal, the Volkswagen Group has been forced to take drastic measures to fund its future strategies.

The Volkswagen Group is the parent to many brands that are Porsche, Audi, Bugatti, Bentley, Seat, Skoda, Lamborghini, Ducati, Man Trucks, Scania and of course Volkswagen. Volkswagen’s Audi division controls Ducati, and the parent has now decided to put, the only two-wheeler manufacturer it owns, up for sale.

Latest reports suggest that Milwaukee-based motorcycle manufacturer, Harley-Davidson has lined up to take over Ducati. The deal between the American manufacturer buying off the Italian motorcycle maker is estimated to be worth €1.5 billion. Other companies, including Indian motorcycle and three-wheeler maker, Bajaj Auto have also reportedly shown interest, and have been gathering the funds to acquire Ducati from the Volkswagen Group.

A Reuters report claims that Harley-Davidson has hired Goldman Sachs to work on the deal, and tentative bids are expected to be made in July 2017. The investment banking advisory firm, Evercore Partners, has been given the responsibility, by the Volkswagen Group, to work out the necessary details regarding the sale of Ducati Motor Holding S.p.A.

Following the scandal, in June 2016, VW stated that it would review assets and brands which it has invested in. This suggested that Volkswagen AG may put up some of its brands and businesses for sale. In April 2017, Volkswagen reportedly had started scouting for buyers for the Italian motorcycle brand. Sources estimate that €1.4 to 1.5 billion could be generated by Volkswagen with the sale of Ducati, valuing the brand and assets at 14-15 times its earnings before interest, taxes, depreciation and amortisation of about €100 million.

Indian motorcycle manufacturer, Hero MotoCorp and rival TVS Motor Company both had reportedly shown interest in Ducati. However, due to the high evaluation of the brand, both companies decided otherwise.

Further details and confirmation regarding this deal, is expected to be revealed in July 2017.

Source