Royal Enfield may be preparing to buy out Italian super bike maker Ducati, says report

Is India's own Royal Enfield preparing to buy out super bike maker Ducati? According to a report in The Times of India, the Indian bike company has been approached for a possible acquisition of the Italian company.

A report in Reuters last month said Volkswagen is considering a possible sale of Ducati as the group streamlines operations to help fund a strategic overhaul following its emissions scandal.

The report said VW has tasked investment banking boutique Evercore to evaluate possible options including a sale of the Ducati brand, which its Audi division acquired for about 860 million euros ($935 million) in 2012.



The report also said 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.

According to the report in TOI, Ducati may be valued about Rs 10,500 crore. Eicher Motors, of which Royal Enfield is a part, did not comment on the development but Siddhartha Lal, MD & CEO of Eicher Motors, told the newspaper that the company is "open to thoughts and ideas".

The report quotes sources as saying that the Indian company is keen to explore any possible acquisition of Ducati.

According to the Reuters report, Ducati's annual earnings before interest, taxes, depreciation and amortisation (EBITDA) stood at roughly 100 million euros.

The report had said the motorbike maker may appeal to peers in China, India's Hero or investors such as the consortium that bought British sports car maker Aston Martin in 2007.

Royal Enfield had last week said it plans to invest Rs 800 crore during this fiscal on various activities including its upcoming manufacturing facility near Chennai and new product development.

"We will be investing Rs 800 crore in FY 2017-18 towards our upcoming manufacturing facility at Vallam Vadagal near Chennai, product development, two technical centres in the UK and India and towards market expansion," Lal had said in a statement.

The new plant is expected to be operational by August 2017 taking the combined capacity of Royal Enfield to 8,25,000 motorcycles in 2017-18.

During the fourth quarter of the last fiscal, Royal Enfield posted its best ever performance, selling 178,345 motorcycles, up 20.8 percent over 147,618 motorcycles sold in the same period last year.

The two-wheeler maker also posted its highest ever quarterly income from operations at Rs 1,888 crore for the fourth quarter ended 31 March, a growth of 23.2 percent over the corresponding period last year.

Royal Enfield now has 25 exclusive stores in international markets.

With inputs from PTI

Updated Date: May 08, 2017 13:18 PM

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