The Clash’s hit song “Should I Stay, Or Should I Go” might perhaps perfectly fit the business situation for Ducati, within its parent company, Volkswagen AG. The Italian motorcycle brand’s status in the German conglomerate has for the past few years been held on a tenuous string. Rumor about its divestiture, its selling to another company, are constantly dogging the iconic brand. Talking to Bloomberg TV after Volkswagen’s quarterly earnings report, VW CEO Herbert Diess explained that there are two paths forward for Ducati, and one of them includes selling Ducati to the highest bidder. “We have to look which is the best ownership for Ducati,” said Diess to Bloomberg.
The writing was on the wall with this piece of news, as after Audi’s acquisition of Ducati Motor Holdings, AMG has terminated its marketing partnership with Ducati. The announcement should not surprise anyone, as AMG & Ducati were certain to sever ties as soon as Mercedes-Benz bowed out of acquiring Ducati Motor Holding, and Audi was rumored to have picked up the ball.
Marketing with “the other team” surely neither Audi nor AMG wanted Ducati to be associated with the other, and all that remained was some fancy foot-work from the lawyers to end the partnership amicably and swiftly. Needing only a day to do so, we think the language in AMG’s statement after the jump has interesting spin to suggest the suits could have done a better job.
More reports are starting to surface about Audi’s pending purchase of Ducati Motor Holding from Investindustrial. Said last month to have offered the private equity firm somewhere in the neighborhood of €750 million, Reuters is now reporting the figure to have been closer to the €870 million to €875 million range, which is closer to the original rumored offer of €850 million by the German automaker. What is most interesting in the report by Reuters is the notion that Audi is not making an offer to buy all of Investindustrial’s financial position in Ducati Motor Holding, which accounts for about 70% of the company.
According to Italy’s Correrie di Bologna, the Volkswagen Group has made a €750 million bid on Ducati Motor Holdings. Just shy of Investindustrial’s reported €832 million asking price on the Italian motorcycle manufacturer. Reports are also saying that Volkswagen’s due diligence process has uncovered that Ducati has less debt on its books than previously thought (previously rumored to be in the €200 million range), and that the €750 million offer would nearly double Investindustrial’s initial purchase price of the Italian company.
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.
With nothing coming to fruition on the Mercedes deal, Ducati again made waves in August when it was reported that the company was interested in making a private stock offering in 2012. Today’s news of course is the logical extension of that announcement, as it is both 2012 and Investindustrial is rumored to be in talks with several possible private buyers for Ducati. While none of this news should surprise anyone, what is of note is the price tag being attached to Ducati is €1 billion.
BMW isn’t the only company weathering the storm in the motorcycle industry, as Ducati North America has released some of its own numbers from 2010. At the top of the highlight list is Ducati North America’s 35% increase in December 2010 sales over December 2009’s sales figures.
Also bucking the trend was DNA’s growth in Q3 & Q4 of 2010, where the company sold 8% & 9% more motorcycles respectively than in the same quarters in 2009. Compare that to the North American motorcycle industry averages, which saw a 15% decrease in Q3 and 14% decrease in Q4 last year.
UPDATE: Michael Lock has announced that he has taken on the role of Chief Marketing Officer (CMO) at Think, an electric car manufacturer.
Asphalt & Rubber broke the news last week that Michael Lock was leaving Ducati North America before the company even knew it, and now the news that Michael Lock is leaving Ducati North America is finally official. Leaving the company in two weeks at the end of July, Lock will be moving on to pursue other interests.
Ducati Holdings Vice President of Sales Cristiano Silei will takeover at Ducati N.A. in the interim, as the company looks for a new CEO. With such short-notice on Lock’s departure, we’re left pondering why the successful CEO is leaving the company, more as we find it. Press release after the jump.