Car maker Audi is poised to buy Ducati

Last month, it was reported that the Ducati company was looking for a buyer. German automaker Audi, a subsidiary of the Volkswagen Group, has struck an exclusive deal to buy the motorcycle manufacturer.

Audi has until mid-April to make a final decision on the purchase. The purchase, which could cost Audi over 1.1 billion dollars if they pay the asking price, is part of Audi's Project Eagle. Audi has been in the market to buy a prestigious motorcycle brand for a while. The company considered buying Horex, but the brand recognition just wasn't there.

Ducati currently builds about 40,000 motorcycles a year, but its debt burden currently exceeds its sales. Higher unit sales, especially in the US, have been showing an upward trend, however.

Ducati's debt is around $750 million and insiders are guessing that Audi's offer will be somewhere between $65 and $130 million, with an agreement to assume Ducati's debt.

Other companies such as Daimler, Hero, and Mahindra have expressed interest in the motorcycle company as well. The exclusivity agreement gives Audi the first opportunity to purchase Ducati.

Audi advisors from Project Eagle are now working on doing the due diligence of going over the fine print of a deal. Tours of the production facility and the research and development departments are also being made.

[Car Magazine]