Eicher Motors, the parent company of Royal Enfield have been showing interest in acquiring the Italian motorcycle brand Ducati. This was a mere speculation some time back and there was not any progression in the deal. Recently, we are learning from The Economic Times that Royal Enfield has finished its first rounds of negotiation and would most likely place an offer to acquire Ducati at around $1.8-2 billion. The Ducati Motors is currently owned by the Volkswagen Group and if the deals go well, the most exclusive and desirable motorcycle brand, Ducati, will be owned by Royal Enfield.
What is more interesting about the acquisition is that the experience, exposure, technical and engineering strengths, brand equity and global presence will now be available for the Royal Enfield brand. This means that Royal Enfield would also be greatly benefited by this acquisition as they are primarily a cruiser and tourer motorcycle company.
To evaluate the value of Ducati, Boutique Investment Bank and Evercore have been hired. The sale of Ducati has been a way for the Volkswagen Group to fund their electric mobility plans. Previously, it was obvious that brands like Bajaj Auto and Hero MotoCorp were expressing their interest in the acquisition but later Bajaj went ahead and partnered with Triumph Motorcycles and Hero has been silent about their interest.
In the global scene, Harley-Davidson and Suzuki were interested in acquisition also but no word of their bidding process yet. Volkswagen Group will be benefited and eased by the sale of Ducati Motors but the German Trade Union are not very happy about the selling.
All things considered, Royal Enfield is playing in the 350-500cc segment and will increase it to 750cc whereas Ducati was always playing north of 800cc to 1200cc with many offerings like naked, cruisers etc and it would be interesting to see what this acquisition will do for both the brands. Of course, we are not hinting a mix of both of these brand elements to form a new bike but only time will tell what both company strengths will pan out to bring to the world.