» Motorcycle merger:
A takeover bid by Harley-Davidson for Italy-based Ducati would blend two iconic motorcycle brands, according to reports.
If Harley-Davidson and European bike maker Ducati get married, no doubt it will be a lively Italian wedding where the bride wears leather, not lace.
They’re not even dating yet, but this week the news agency Reuters reported that Harley was lining up a takeover bid for Italy-based Ducati, potentially bringing together two of the most famous names in motorcycling in a deal worth up to $1.67 billion.
Milwaukee-based Harley has hired Goldman Sachs to work on the bid, a source told Reuters, adding that tentative bids were expected in July.
India-based Bajaj Auto and several buyout funds also are preparing offers for Ducati, which is being put up for sale by German automaker Volkswagen, according to Reuters.
Harley-Davidson would not comment on the report, from London, but it wouldn’t be the first time the world’s largest manufacturer of heavyweight cruiser and touring bikes has been the subject of industry speculation or a match with an Italian motorcycle manufacturer.
In some ways, Ducati would be quite the catch. The company’s fast, expensive motorcycles have a celebrated racing pedigree and often dominate road racing championships.
Harley often sells more bikes every three months than Ducati sells in a year, yet both companies are considered premium brands in their respective fields.
“We view Ducati as the Ferrari of sport bikes, race bred and very much a niche market,” said Michael Casey, a Ducati enthusiast and co-founder of Motovid, a Delavan firm that offers road racing classes.
Both brands have exceptional customer loyalty, with Harley riders coming to Milwaukee from all over the world to tour the factory and company museum, while Ducati riders make a similar pilgrimage to Bologna, Italy.
Ducati riders call themselves “Ducatistas.” Hispanic Harley riders, anyway, call themselves “Harlistas.”
Seeking to diversify its motorcycle lineup, attract younger riders and strengthen European sales, Harley-Davidson could benefit from having Ducati in its portfolio.
Should the deal happen, however, Harley ought to keep the Ducati brand separate and not rebadge the bikes under the 114-year-old Milwaukee company’s name, Casey said.
Both companies have well-established motorcyclist groups that view cycling as a lifestyle.
“But you are not going to mix a Harley owners group with a Ducati owners group. They’re totally different worlds,” Casey said, with Harley riders favoring street cruisers and touring bikes over swoopy, Euro racers built for speed, not comfort.
Harley-Davidson had an earlier Italian
marriage when, in 2008, it acquired motorcycle maker MV Agusta for $109 million. One of that company’s bikes, the F4CC, was a limited production machine that had a top speed of 195 mph and sold for about $120,000. The rest of the lineup fell in a price range of about $15,000 to $30,000.
Less than two years after buying MV Agusta, Harley essentially paid the previous owners to take it back. The relationship with the Italians ended when sport-bike sales collapsed in the Great Recession.
In 2009, Harley also dropped the Buell Motorcycle Co. line of sport bikes made in East Troy.
Sales of Buell and MV Agusta motorcycles never gained much traction in Harley-Davidson dealerships. Realizing the business wasn’t going anywhere, Harley said the company’s dollars were better spent on its own motorcycles than other brands.
Likewise, investors could be skeptical of Harley acquiring Ducati, said analyst Robin Diedrich with Edward Jones Co.
“I think focusing on the Harley brand is what’s worked,” Diedrich said. “They are under pressure to make some changes, but this doesn’t seem like the path that makes the most sense for them at this point.”
Harley-Davidson could attract new, young customers through Ducati, and those folks might someday buy a Harley cruiser or a touring bike as their interests in motorcycling changed over the years.
But Ducati has other bikes in its lineup, too. And it attracts customers who are a little older and more financially established than typical young motorcyclists, and those folks aren’t as likely to switch brands.
“We have customers who buy Ducatis their whole life,” said Ross Bennett, sales manager at Moto Union, a dealership in West Allis.