Published: Mon, May 08, 2017
Finance | By Laverne Griffith

Royal Enfield in talks to acquire Italian brand Ducati

Royal Enfield in talks to acquire Italian brand Ducati

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 world's oldest motorcycle brand in continuous production Royal Enfield is reportedly in talks with Volkswagen group to buy the Ducati brand. Royal Enfield has left no stone unturned and is expanding aggressively in the market overseas. The company's MD and CEO, Siddhartha Lal, did not confirm or deny the approach, saying: "So basically, without saying absolutely no to anything - because we never say never - we are so zeroed in on our own opportunity that we do not want anything to distract us". Royal Enfield claims a market share of 96 per cent in the mid-size motorcycle segment and has a market capitalisation of over Rs 52,000 crore. According to estimates, Ducati could fetch a valuation of about Rs 10,500 crore.

The Italian company sold 55,451 units past year (at a growth of 1.2%), and enjoys a cult branding across the world with a healthy network in many developed markets.

Volkswagen, Ducati, Hero MotoCorp nor Royal Enfield have commented on this so far.

In April 2017, Royal Enfield posted its highest-ever monthly sales of over 60,000 bikes in one single month.

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Ducati now produces motorcycles in six models, such as Superbike, Diavel, Hypermotrad, Monster, Multistrada, and Street Fighter and sells over 40,000 across the globe, with the USA being its main market.

Royal Enfield now has 25 exclusive stores in global market. Its reserves at the end of fiscal 2016-17 were over Rs 3,500 crore, growing by almost Rs 600 crore over the past six months.

The news has come to light after the diesel emission scandal took place, thus creating a big trouble for the Volkswagen group. For this reason, the company had hinted to sell its no core businesses like Ducati.

Right now, Ducati bikes sold in India are manufactured in Thailand.

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