Audi Ag, the German automobile manufacturer has agreed to buy Italian motorcycle maker Ducati for about $1.12 billion (860 million euros) including debt, Reuters reports citing two people familiar with the matter.
VW’s supervisory board is set to approve the deal tomorrow.
At that price the deal, minus debt, would value Ducati at about seven times last year’s earnings before interest, taxes, depreciation and amortization.
Reports had emerged last month that Audi is in talks to buy Ducati and could make a decision by the end of April.
Volkswagen’s chairman Ferdinand Piech had expressed interest in buying Ducati in April 2008, but eventually lost out to Ducati’s current owner and Italy-based private equity company Investindustrial.
Why? Well, BMW has a premium motorcycle brand, and like all small children, sorry international business titans, everywhere, they want whatever the other one has got.
Audi thinks that Ducati will burnish its performance credibility. Having already bought Lamborghini and created the seminal R8, it is hard to see what further burnishing is required.
Ducati however has also been the focus of negative attention owing to the woes of its MotoGP racing program, namely the poor results and lack of contention from factory rider Valentino Rossi.