Recently, Reuters news agency reported that Harley-Davidson was preparing a potential bid to purchase Ducati in a deal that could be worth up to $1.67 billion. Harley, known for large cruisers, and Ducati, famous for high performance street bikes, would bring together two of the most recognized names in the motorcycle industry.
A source told Reuters that Harley has already hired Wall Street bank Goldman Sachs to begin working on a bid. Tentative bids are expected in July. Others interested in buying Ducati include India-based Bajaj Auto and several buyout funds. Ducati is currently owned by German auto manufacturer Volkswagen.
Potential Benefits for Harley-Davidson
Acquiring Ducati would give Harley-Davidson a prestigious brand name known for a celebrated racing pedigree and dominating road racing championships. Harley often sells more bikes in three months than Ducati sells in a year, but as co-founder of Motovid Michael Casey said, “We view Ducati as the Ferrari of sport bikes, race bred and very much a niche market.”
Harley has been very interested in expanding and diversifying its brand. With Ducati under its wing, it would have a strong foothold in a young European market. Previously, Harley acquired motorcycle maker MV Augusta for $109 million in 2008, but the partnership was short lived. Despite the allure of the F4CC, a limited production bike that could reach 195 mph and sold for $120,000, in 2010 Harley paid the previous owners to take the company back.
In 2009, Harley also let go of Buell Motorcycle Company, manufacturers of sport bikes based in East Troy, Wisconsin. The negative impact of the financial recession forced Harley to unload assets that were experiencing declining sales and riders.