VW considering selling Ducati, sources say

By Arno Schuetze, Andreas Cremer And Irene Preisinger Time of article published Apr 28, 2017

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Wolfsburg, Germany - Volkswagen is reportedly considering a possible sale of Italian motorcycle maker Ducati as Europe's largest carmaker streamlines operations to help fund a strategic overhaul following the 'Dieselgate' emissions scandal.

Two insiders have confirmed that VW is reining in spending across the group, including cutting thousands of jobs at its core passenger-car brand, to help pay for a multibillion-euro shift to electric cars and new mobility services.

VW has tasked investment banking boutique Evercore with evaluating possible options, they said, including a sale of the Ducati brand, which its Audi division acquired for about €860 million (then R9 billion) in 2012.

Apparently VW has started reaching out to potential buyers to sound out their interest but no decision has been taken on whether the brand will be sold.

VW referred requests for comment to Audi; Audi and Evercore declined to comment.

One of the sources said Ducati made annual earnings before taxes of about €100 million euros and could be worth as much as €1.5 billion (R21.76 billion). A banker close to the industry said potential buyers were likely to offer VW more than €1 billion (14.5 billion).

Sources say Ducati may appeal to motorcycle makers in China, India's Hero or investors such as the consortium that bought British sports car maker Aston Martin.

"It is an asset for trophy buyers with bigger interest in the brand than in the technology," one of them said, adding that private equity firms could also be attracted to a brand whose motorcycles have won the World Superbike Championship 17 times, although it was unclear whether major competitors such as Polaris, Harley Davidson, Suzuki, Honda or Kawasaki might be interested.

Ducati has won 17 World Superbike titles; this is Chaz Davies on his way to a race win at Magny-Cours. Picture: WorldSBK

Analysts questioned Audi's purchase of Ducati when it was announced in April 2012, saying the deal had no economic or industrial logic and just reflected former Volkswagen chairman Ferdinand Piech's passion for Ducati design and engineering expertise.

Piech, however, has since bowed out as chairman.

Volkswagen said in June 2016 it would review its portfolio of assets and brands, rekindling speculation among analysts that "non-core" businesses such as Ducati or a diesel-engine business for machinery could be up put for sale. However, by March this year chief executive Matthias Mueller said there was still nothing to announce.


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