Eicher Motors eyes buying Ducati again, set to make $1.8-2 billion bid for the Italian brand

Volkswagen stands to gain more in terms of image if they retain Ducati (even at a loss) than they stand to gain monetarily if they sell it.

By: | Updated: September 7, 2017 11:26 AM

Eicher Motors Ltd, the maker of Royal Enfield classic motorcycles, is set to make a binding takeover bid for Italian motorcycle manufacturer Ducati for $1.8-2 billion, the Economic Times has reported. Eicher is currently finalising and structuring terms with global banks and consulting companies ahead of a bid deadline at the end of the month, the report read, quoting unnamed sources. Turns out that the bid to buy the iconic Italian brand has stretched longer than expected and has witnessed interest from several brands. Previously, sources told Reuters in June that US motorcycle maker Harley-Davidson and Bajaj Auto Ltd were among companies preparing bids for Ducati, which is being put up for sale by German carmaker Volkswagen.

Back in 2012, Audi agreed to buy Ducati from Italian buyout firm Investindustrial for about $962 million. Investindustrial took a controlling stake in the company from another private equity firm, TPG, in 2006.

However, even with a number of brands wanting to sweep Ducati from Volkswagen, the German car marque had denied all reports of it putting Ducati up for sale. This makes perfect sense since VW group half yearly profits, showed more in terms of percentage increase (19% or 8.9 billion Euros) than they could ever hope to make selling the motorcycle brand (Whose bids would max out 1.5 billion Euros).

Speaking to Reuters, a board spokesperson said "The employee representatives on Volkswagen's supervisory board will neither approve a sale of Ducati, nor one of Renk or MAN Diesel & Turbo. Everyone who can read the VW half-year results should know: We don't need money and our subsidiaries are not up for grabs by bargain hunters.” A strong message indeed, but numbers do not lie, the brand stands to gain more in terms of image if they retain the brand (even at a loss) that they stand to gain monetarily if they sell it.

Now that we know the Bajaj's mystery collaboration is Triumph motorcycles and there are no reports of Harley-Davidson extending an offer, Eicher may have a clear shot if VW is willing to let go of ownership of one of the oldest and most iconic motorcycle brands in the world.

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