Like A Caveman Ogling An iPhone, Harley Eyeing Purchase Of Ducati

Like A Caveman Ogling An iPhone, Harley Eyeing Purchase Of Ducati

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by: Mark Fritz, Benzinga Staff Writer

 

In what many motorcycle enthusiasts would consider a marriage made in hell, Harley-Davidson Inc HOG is considering buying Italian motorcycle manufacturer Ducati, the epitome of elegant engineering and sophisticated styling.

Harley, which makes loud and comparatively brutish motorcycles, is among a handful of potential buyers circling Ducati, according to sources quoted by Reuters. The companies are two of the oldest and most iconic brands in biking, but they couldn’t be more dissimilar.

Ducati has a rich racing history and a reputation for refined technical advancements, while Harleys are known for, well, neither of those things. Its bikes reflect a more in-your-face attitude, with cruiser sensibilities that eschew smooth handling characteristics and state-of-the-art engineering innovations.

 

Ducati's Other Suitors

Ducati has changed hands over the years and is currently owned by Volkswagen AG (ADR) VLKAY and managed by its upscale Audi division. Reuters, quoting unnamed sources, said Milwaukee-based Harley-Davidson has hired Goldman Sachs to work on a deal and that bids are expected in July.

Reuters said the deal could be worth of to $1.67 billion.

Based in the northern Italian city of Bologna, where it was founded in 1926, Ducati is also being circled by private equity funds KKR, Bain Capital and Permira, the news agency said. India's Bajaj Auto motorcycle maker is also said to be in the mix.

Harley’s base is heavily weighted with aging baby boomers and its sales have been in decline. Efforts to innovate — it’s hot rod-inspired V-Rod line and forays into electric motorcycles — have been largely rejected by a shrinking but fiercely devoted group of loyalists.

There is strong sentiment for hanging onto Ducati among Volkswagen's supervisory board, particularly among members representing the carmaker’s labor unions.

"Ducati is a jewel, the sale of which is not supported by the labor representatives on Volkswagen's supervisory board," a spokesman for VW group's works council told Reuters. "Harley-Davidson is miles behind Ducati in technology terms.”

 

Image Credit: By Ronald Saunders from Warrington, UK – DUCATI 750 SS. GLEAMING PIECE OF WORKMANSHIP., CC BY-SA 2.0, via Wikimedia Commons

 

© 2017 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

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