It has been almost a year now since we broke the news that Ducati Motor Holding was up for sale, and I still can’t tell if the appropriate metaphor for the ongoing acquisition is a game of musical chairs or Russian roulette. Vying for a seat or putting the chamber to its temple, our latest contestant in “Who Wants to Buy Ducati” is Audi, the four-ringed German car manufacturer. Reported to have a right of first refusal, Audi allegedly has until mid-April to finalize a deal with Investindustrial (Ducati’s main investor) to buy Ducati from the Italian investment group.
Though Ducati sold over 40,000 motorcycles in 2011, the Italian company has roughly €800 million in debt on its books. This means that any company interested in buying Ducati would have to assume the Italian company’s debt onto its own books, which changes the actual purchase price of Ducati dramatically. For its part, Audi is rumored to be making an offer in the €850 million range, which would put the actual purchase value of Ducati at over €50 million, and could put as much as €100 million on the table for Investindustrial to take.
For a bit of history, Ducati’s first suitor was AMG (read: Mercedes-Benz), and while Ducati was keen to sell to the german sport car manufacturer, the Stuttgart natives were reportedly less enthusiastic about the idea. Though AMG and Ducati didn’t enter into a shotgun wedding, the two parties did have a quick torrid affair that resulted in the two companies sharing their marketing efforts, which included the creation of the Ducati Diavel AMG. With the romance reportedly ending late last year, Ducati continued to flirt across the bar with several other brands, and even sent some very ouvert signals with the mention of a private offering and the rumor of a public listing on the Hong Kong stock index.
Since that time (and likely to some extent before it), investment bankers have been trying to line up potential buyers for the brand, with prices in the €800 million to €1 billion range being bandied about by the media, all with a sliding scale of accuracy that can only be found in motorcycle journalism. While companies like VW and BMW have long been linked to buying Ducati, the ah-ha moment in this whole process has been the idea of an Indian suitor.
This has lead to companies like Mahindra and Hero MotoCorp being brought into the rumor fold, which has almost certainly been a complete fabrication by the motorcycle media. The Mahindra component in these reports appears to be caused from pure speculation by some India-based news sources, while Hero’s involvement has been twisted around to make the India’s largest motorcycle-maker more involved than it actually is. With investment bankers approaching Hero, not the other way around, the Indian company confirmed that it had looked into buying Ducati, as it does with all credible offers that are brought to it its table — nothing more, nothing less.
This chain of events brings us to the present, where now reports are circling that Audi could be the new home of Ducati motorcycles. Though spreading over the internet like wildfire, the news comes from a solitary article on Car Magazine, which has been reprinted by several of the magazine’s other sister publications. According to Car, this news dovetails nicely with VW Chairman Ferdinand Piech’s desire to have a motorcycle brand in its wings.
Linked first to Horex, the idea of reviving the aged brand was deemed less appealing by Volkswagen than purchasing a turn-key operation. The purchase would also give VW something to rival BMW Motorrad, though perhaps most importantly, Ducati’s lower carbon emissions could help offset the large touring cars that Audi builds, as emissions standards in Europe continue to get more stringent. Should Zie Germans like what they see as they go through Ducati’s books and operations, it would prove to be a pivotal point in time for the Italian brand. A company like Audi would have the kind of resources Ducati would need to mount a larger global operation, which would help take Ducati to its next mile-marker on its goal sheet.