U.S. motorcycle maker Harley-Davidson is reportedly lining up a takeover bid for Italian rival Ducati. As Ivor Bennett reports, it would bring together two of the most famous names in motorcycling in a deal that could be worth up to 1.5 billion euros.
It's so much more than just a motorbike. And could soon be more than just one company. Harley-Davidson is reportedly lining up a bid for Italian rival Ducati. Which is being sold by Volkswagen in the wake of its emissions scandal. SOUNDBITE (English) THINK MARKETS, CHIEF MARKET ANALYST, NAEEM ASLAM, SAYING: "The firm wants to strengthen their own balance sheet once again. So they said 'okay, this is the business that perhaps we could easily sell and wouldn't have too much of an impact. And we can leave the legacy behind when it comes to emissions scandal that we are facing'." Ducati racers have won the Superbike world championship 14 times But the company began life, over 90 years ago, making vacuum tubes and radio components. It's a heritage VW's powerful labour unions have made clear they want to keep. But Harley's isn't the only bid they'll have to fend off. Indian rival Bajaj Auto and several buyout funds are also interested, despite the high price. Which at 1.5 billion euros, is 15 times Ducati's forward earnings. SOUNDBITE (English) THINK MARKETS, CHIEF MARKET ANALYST, NAEEM ASLAM, SAYING: "It's all about striking the balance, getting the deal at the right price. Who would get it? That would remain the question. But again who's going to benefit the most? It's going to be Volkswagen out of this." Harley-Davidson would benefit too though - Ducati is streets ahead in terms of technology... ...and its traditional market, well, can't live forever. If the deal does go through, it'll bring together two of the most famous names in the business. One a light-touch racing machine. The other pure heavy metal.