Economy

Royal Enfield (Eicher Motors) Makes A Binding Bid To Buy Ducati

Royal Enfield (Eicher Motors) Makes A Binding Bid To Buy Ducati”

Now, the Economic Times is reporting that Royal Enfield, amongst the world's most profitable two-wheeler manufacturers is preparing a US$1.8 billion (That's approximately Rs 12,000 crores) bid for Ducati.

If successful, the move will power Eicher Motors' portfolio, brand equity, global reach and access to technology, multiple sources aware of the development told ET.

Led by Siddhartha Lal, Eicher Motors is said to be the only Asian bidder remaining in contention to acquire Ducati.

As per ET Auto, Eicher is now finalizing and structuring its terms with global banks and consulting companies ahead of the end of the month bid deadline. The Volkswagen Group has been on the lookout since April 2017 for a suitable company to purchase Ducati, which is owned by Volkswagen's subsidiary Audi.

The brand is looking to be sold around €1.5 billion, the report added. This would value it at 14-15 times its EBITDA of about €100 million. Barring TVS Motors and Tata Motors, all the other auto stocks in the index were trading in positive terrain.

Royal Enfield (Eicher Motors) Makes A Binding Bid To Buy Ducati

Though the company has made a decision to sell off its wing, it has started to face a lot of resistance from inside. VW's German trade union has opposed this process of selling Ducati, regardless of the price.

The VW Group will have a board meeting on September 29, 2017, to decide if Ducati will actually be on sale.

There have been a few setbacks for the VW Group in selling Ducati.

Eicher is now a notable name in 350-500cc segment and with the acquisition of Ducati, it will also register itself as an influential brand in the 800-1200cc bike segment.



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