According to various media outlets, Royal Enfield is planning to buy Italian motorcycle brand Ducati, owned by German auto conglomerate Volkswagen.. However, the company has denied any such move, which may call for huge investment.
It may be noted that Reuters had earlier reported that Hero Motor Corp is looking at buying Ducati. However, according to a Times of India report, Royal Enfield has reportedly approached to acquire Ducati.
Ducati is expected to fetch a value of up to 1.5 billion euros (around Rs 10,500 crore) from the deal, while Royal Enfield had a reserve at the end of the financial year 2016-17 of about Rs 3,500 crore.
Volkswagen is considering options to fund its multi-billion Euro shift to develop electric vehicles following the emissions scandal and one of those options is to sell the Ducati brand.
Royal Enfield has been growing exponentially over the past decade. In April 2017, Royal Enfield posted its highest-ever monthly sales of over 60,000 bikes in one single month. In 2016-17 Royal Enfield sold over 6.6 lakh motorcycles, a growth of nearly 32 per cent over the previous year. 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.
Royal Enfield said they will not be able to comment on speculation whilst Ducati also remain silent on the speculation.
Posted by Jonathon Burgess on 11th May 2017