The owner of Italy’s Ducati has put the motorcycle brand up for sale. The price? A nice and even €1 billion ($1.3 billion).

Ducati is currently owned by a Milan-based private equity firm called Investindustrial Holdings. Its CEO, Andrea Bonomi, bought the motorcycle manufacturer in 2005 and attempted to turn it into “ Audi of the two-wheeler world”.

In the eyes of Bonomi that goal has been reached, and he thinks that it is time to move on and cash in on his investment.

“Ducati is now a perfect company but for further growth it requires needs the support of a world-class industrial partner,” said Bonomi in the Financial Times. “This year, we will work towards that partner.”

Ducati is not as perfect as Bonomi claims. The company’s debt equals about 1.7 times its earnings before interest is factored into the equation.

According to several reports, the most likely suitors for the motorcycle brand are Volkswagen and Mercedes-Benz’s AMG division.

Both parties’ interest makes sense. AMG and Ducati entered in a partnership about a year ago, and Volkswagen has been interested in buying the brand since 2008 in order to enter the motorcycle world.

It is worth noting that another interested company is India’s Mahindra & Mahindra, which already owns a motorcycle division.

If Bonomi is unable to sell Ducati to a private company, he will turn to Deutsche Bank and Goldman Sachs for help in holding an initial public offering for the company in Hong Kong.

Ducati sold about 40,000 motorcycles last year, which gives it approximately 9% of the global sports motorcycle market.

By Georg Kacher

Motor Industry

12 March 2012 09:50


Audi has struck an exclusive deal giving it first rights to buy Italian superbike manufacturer Ducati, CAR can reveal.

The exclusivity deal gives Audi until mid April when the deal will likely be finalised, according to high-ranking sources contact by CAR.

Ducati's liabilities are said to be in the area of €800 million, and our sources suggest the total purchase price is about €850m. This is a bold move by Audi, which sees the long-term advantage in moving into two wheels as well as four.

Why is Audi buying Ducati?
It's all part of Project Eagle, another brainchild of Volkswagen group scion Ferdinand Piech. He has been eyeing up the opportunity of buying a prestigious motorcycle brand for some time, and considered reviving Horex, a German motorbike firm which made single- and twin-cylinder bikes from 1936 to 1956.

But Horex doesn't have enough brand recognition, so when Bologna-based Ducati came up for sale the VW Group paid close attention. Especially since Mercedes-Benz recently entered into a cross-promotional deal with Ducati.

Ducati, which makes around 40,000 motorcycles a year, is on the market since its debt burden is reportedly higher than its revenues.

Who else might buy Ducati?
India´s Mahindra, Daimler and Volkswagen are said to be among the leading suitors, but CAR can reveal that Audi has struck an exclusivity deal giving it first dibs on Ducati.

A small team of advisors has been formed in Ingolstadt under the Project Eagle name and they're currently doing due diligence on the Ducati deal. According to our insiders, there is no way Audi will pay telephone numbers for Ducati. Instead, the Germans will probably put no more than €50m to €100m on the table - but absorb the new partner's substantial liabilities.

Ducati chairman Andrea Bonomi has in the past pointed out that he views 'Ducati as the two-wheel equivalent of Audi', a perception Ferdinand Piech would likely agree with. In 2008, Piech said it was a mistake not to have bought Ducati when the company was on the brink of brankruptcy before. Four years later, Volkswagen is now closer then ever to making the chairman's vision complete.

But first of all, the Audi delegation must take a deep dive into the Ducati R&D department and check out the Borgo Panigale production facility. After all, it takes more than a strong name to make Project Eagle fly.

Today is shaping up to be a big day for Audi. Following an announcement that it had selected Mexico as the home of its new North American plant, Audi has confirmed that it has successful purchased motorcycle maker Ducati.

Audi parent Volkswagen approved the acquisition today at a board meeting in Hamburg, with authorization from local authorities representing the final step in the purchase process. Ducati will be VW’s third Italian division, joining Lamborghini and Italdesign.

“Ducati is known worldwide as a premium brand among motorcycle manufacturers and has a long tradition of building sporty motorcycles. It has great expertise in high-performance engines and lightweight construction, and is one of the world’s most profitable motorcycle manufacturers,” said Rupert Stadler, Chairman of the Board of Management of AUDI AG. “That makes Ducati an excellent fit for Audi.”

Although somewhat of an odd pairing, Audi is looking to capitalize on the growing motorcycle industry which is expect to boom – particularly in Asia – over the next few years. Ducati, which employs 1,100 people, sold 42,000 units last year.