Royal Enfield parent Eicher Motors to make $1.8 billion bid for Ducati

Eicher Motors, the parent of Royal Enfield which is known for its cult motorcycle 'Bullet', has made a binding offer to acquire Italian superbike manufacturer Ducati for $1.8 billion - $2 billion.

According to a TOI report, Siddhartha Lal-led Eicher Motors is believed to be the only Asians left in the fray in the ongoing auction for the Ducati disposal, is currently finalising financing and structuring terms with a clutch of global banks and consulting companies ahead of the deadline, that was scheduled for this month end.

German carmaker Audi had bought Ducati for around $1.12 billion in 2012 through its Italian subsidiary Lamborghini. The Bologna-headquartered superbike maker comes under the mammoth Volkswagen Group.
 
The German automotive company has been working with boutique investment bank Evercore to sell the brand for around 1.5 billion, valuing it at 14-15 times its earnings before interest, taxes, depreciation and amortisation (EBITDA) of about 100 million to help it fund a strategic overhaul following its emissions scandal, the report said.

Volkswagen Group's plan to sell Ducati had evinced interest from a Harley Davidson, Suzuki, home grown Bajaj Auto and Hero MotoCorp Ltd as well as private equity buyout funds like KKR and CVC Capital Partners, the report added.

On Tuesday, a Reuters report said that Volkswagen has put the 1.5 billion-euro ($1.8 billion) sale of Ducati motorcycles on hold after resistance from German trade unions and internal rifts on strategy.

Ducati is wholly controlled by VW's luxury brand Audi, which is at odds with the parent over strategy, and a decision to sell the 91-year old business, which is based in the Borgo Panigale district of the northern Italian city of Bologna, needs to be approved by VW's supervisory board, it said.

Labour leaders at VW, who hold half the seats on the 20-member board, had strongly opposed a sale regardless of price VW has told five bidders to hold off making binding bids for Ducati, which it put up for sale in April to help raise cash to fund a strategic overhaul following the emissions scandal at Europe's largest automaker.