Audi has reached an agreement with Investindustrial to buy Ducati, the maker of luxury motorbikes, according to Automotive News Europe. VW's supervisory board is set to approve the deal on Wednesday, said a person familiar with the details, who declined to be identified.
The purchase sets up a battle royal between BMW and VW in the motorcycle market, both in sales and racing competition. Ducati, sold about 42,000 motor bikes in 2011, and had revenues of $630.3 million. BMW reported sales of 104,286 units, and revenues of $1,881 million, its best year ever.
Audi and Ducati owner Investindustrial declined to comment. At that price the deal, minus debt, would value Ducati at about seven times last year's earnings before interest, taxes, depreciation and amortization. Ducati's total liabilities are less than $262.7 million, buyout firm Investindustrial said last month.
Volkswagen Chairman Ferdinand Piech, who turned 75 on Tuesday, has long coveted the brand, publicly expressing interest in buying Ducati in April 2008, before eventually losing out to Investindustrial.
The purchase will make Ducati the 11th brand in VW's portfolio, alongside supercar marques Lamborghini and Bugatti and heavy-duty truck manufacturers Scania AB and MAN SE.
"Ducati is one of the finest machines you can buy but strategically it's insignificant for Volkswagen," said Christoph Stuermer, a Frankfurt-based analyst with IHS Automotive. "Its revenue is more than Lamborghini's and Bugatti's combined, but to the automotive operations, it's a mere accessory."
Ducati would complement Audi's luxury-car lineup with products such as the $28,000 Superbike 1199 Panigale S Tricolore and expand the brand's competition with BMW, which makes BMW and Husqvarna motorcycles.
For Volkswagen, the deal would mean an entry into the motorcycle business and gaining another asset in Italy after buying Lamborghini and Italdesign Giugiaro. Piech has also expressed interest in the past in Fiat's Alfa Romeo brand.
Hero MotoCorp Ltd., India's biggest motorcycle maker, also inquired about Ducati, after Investindustrial made it known in February that it planned to sell the company. Daimler has stated that it's not interested in acquiring Ducati.
Ducati, which was founded in 1926, sells the Superbike, Monster, Streetfighter, Hypermotard, Multistrada and the new Diavel models in 65 countries. Over the past 60 years it has won 17 manufacturer's World Championship titles, most recently winning the 2011 World Superbike Championship title. ––Paul DucheneBack to News