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Ducati has been purchased by German luxury car maker Audi -- itself owned by the Volkswagen Group -- after four years under the helm of a private equity group

It's finally official - Audi owns Ducati.

Once government approval is given, Ducati will become a German-owned company with German values after confirmation that Audi has paid €860 million ($A1.3 billion) for a 70 percent controlling stake in the company.

The announcement was made public at the German company's annual shareholders and gives Audi's owner, the Volkswagen Group, its first motorcycle company, and the 11th brand in its portfolio.

Hero MotoCorp Ltd. (HMCL), India’s biggest motorcycle maker, was also thought to be one of the company's interested in buying Ducati.

"Ducati is known worldwide as a premium brand among motorcycle manufacturers and has a long tradition of building sporty motorcycles. It has great expertise in high-performance engines and lightweight construction, and is one of the world's most profitable motorcycle manufacturers. That makes Ducati an excellent fit for Audi," Rupert Stadler, Chairman of the Board of Management of AUDI AG, declared.

Ducati is believed to owe around €200 million in debt but this is chickenfeed for the VW Group.

The acquisition of Ducati by Audi and the VW Group is certainly not a financial decision, with the motorcycle company not expected to contribute much to the European automotive giant's bottom line. However VW Group chairman, Ferdinand Piech, is long believed to have wanted the exotic Italian brand under his command -- he looked at purchasing it in 2008 before being outbid by the current owner -- with some analysts saying it was a purchase of passion. There is even a rumour it was Piech's 75th birthday present!

The deal will give Audi a new tool with which to rival BMW's motorcycle outfit, BMW Motorrad and though there has been much comment about the Germans stripping the soul from Ducati, Volkswagen has shown with marques such as Bugatti, Bentley and Lamborghini that it is content to let them forge their own indentities.

The current owner of Ducati, Milan-based private equity firm Investindustrial, will make lots of cash from its four-year involvement -- up to three times the amount it paid.

As previously reported, Audi had the first right of refusal on any bids for Ducati, which meant that no other company or group could make a move on Ducati until Audi's exclusivity deal ended on April 15, 2012.

Other interested companies now out of contention included Indian car maker Mahindra, and Indian motorcycle giant Hero.

It is not clear which company stands to benefit more from the deal. Ducati could potentially get an injection of funds to increase its product portfolio, while Audi will gain a motorcycle company, and all the technology that Ducati has developed in regards to small capacity, high output engines.

And will VW want to continue pouring money into MotoGP racing?

The acquisition also begs the question: will we see Audi-badged motorcycles in the future?

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Published : Thursday, 19 April 2012
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