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Audi buys Ducati Motorcycles for a speculated $1.1 Billion

20th April 2012, 13:06 by Munjal Savla

Audi, a part of the Volkswagen group, confirms the acquisition of Ducati Motorcycles from Investindustrial SpA. While the exact amount is undisclosed, the number most analysts are pointing to is $1.1 Billion (including debt of $250 million). The legendary Ducati brand will be the 11th automotive brand under the Volkswagen umbrella. Interestingly, Ducati is also the 3rd Italian brand of the VW portfolio, after Lamborghini & Italdesign. VW Chairman Ferdinand Piech is a known motorcycle buff, and had expressed regret over losing in the bid for Ducati in 2006 to Investindustrial SpA. You could say that Mr. Piech had a large influence in this acquisition.

Audi insists that, one of the advantages of this acquisition will be gaining knowhow about small, high-performance motors. This is especially important in an era of downsizing, where cars are powered by increasingly smaller engines in the quest for higher fuel-efficiency. Ducati has carbon-fibre expertise to offer too. Ducati could just be Audi's answer to fierce competitor BMW's motorcycle range. On the flip side, this acquisition has received a fair share of criticism. Unlike most mergers in the automotive space, we can safely conclude that neither Audi nor Ducati will save money from platform or parts sharing. Some insist this is little more than a trophy merger. How Ducati finds its place in the VW family remains to be seen.

It is noteworthy to mention that Indian brands such as Mahindra & Mahindra and the Hero Group were also in the running to acquire Ducati.

In 2011, Ducati sold ~42,000 motorcycles and generated revenues of about $630 million. The company employs 1,100 people, and entered the Indian market in 2008.

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Additionally, here's an interesting article from Wired.com about the takeover: Audi Buys Ducati for $1.12 Billion, But Why?

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