Indian Hero MotoCorp to buy Ducati?

[manojb]

After TATA's bought Jaguar-Landrower its Hero MotoCorp to buy Ducati..?

Hero MotoCorp in Talks With

 

[IndoUS]

Just wow talk about expanding.

 

[The enlightened]

India’s Hero Eyes Ducati Amid Takeover Quest

Ducati Motor Holding SpA (DMH), maker of luxury bikes ridden by celebrities such as Brad Pitt, is among assets being examined by Hero MotoCorp Ltd. (HMCL) as India’s biggest motorcycle maker looks for acquisitions to expand overseas.

“Lots of people have been coming to us with Ducati -- not one banker but many bankers,” Pawan Kant Munjal, managing director of Hero, said in a March 2 interview in New Delhi. “We’re talking to a lot of people. Not just Ducati -- whoever comes to us, we talk to them.”
Ducati would add products such as the $28,000 Superbike 1199 Panigale S Tricolore to a company that’s amassed a $1 billion war chest selling bikes for as little as 38,053 rupees ($763). Hero may be seeking to replicate the success of Tata Motors Ltd. (TTMT), maker of the world’s cheapest car, which is seeing profits surge after buying Jaguar Land Rover Plc.

“It is an excellent fit -- Ducati is a big brand and has a lot of technology; Hero is looking to be a serious global player,” said Deepesh Rathore, managing director of IHS Automotive in India. “Hero might get it cheap. Thanks to the European slowdown, Ducati’s numbers haven’t been great.”

Hero, which in December 2010 decided to exit a 26-year partnership with Honda Motor Co. (7267), the world’s largest motorcycle maker, is looking to gain technology through partnerships and acquisitions after that licensing relationship ends in 2014. Last month, Hero entered into a partnership with Erik Buell Racing, where it would sponsor two EBR teams in the AMA Pro Racing National Guard Superbike Championship in return for technology and design support for future models.
Hong Kong IPO

Hero (HMCL) has cash reserves of about $1 billion, Munjal said. The company had investments of 37.5 billion rupees, cash and bank balances of 1.4 billion rupees, as well as reserves and surpluses of 40.8 billion rupees as of Sept. 30, according to the company’s latest earnings statement.

Investindustrial SpA, the Milan-based private-equity company that owns Ducati, may hold an initial public offering of the luxury-motorcycle maker in Hong Kong this year or sell it to a rival, two people familiar with the plans said last month.

An external spokesman for Investindustrial declined to comment on the possible sale of Ducati. He didn’t want to be named citing company policy.

Investindustrial is seeking to sell or list Ducati for as much as 1 billion euros ($1.3 billion), the Financial Times reported last month, citing Andrea Bonomi, chairman of the European buyout firm.

Bayerische Motoren Werke AG (BMW) said last month it’s not interested in buying Ducati, which was delisted in 2008 from the Milan stock exchange.
Expanding Outside India

Hero and Bajaj Auto Ltd. (BJAUT) are looking to expand overseas as competition intensifies in India, the world’s second-biggest motorcycle market after China, as Honda, Yamaha Motor Co. (7272) and Suzuki Motor Corp. (7269) expand capacity in the country.

Honda is increasing its operations in India and will spend as much as 10 billion rupees on its third factory near Bangalore in southern India that will be ready in 2013, the company said in August. When complete, Honda will have the capacity to build 4 million two-wheelers in India annually.

Motorcycle sales in India grew 15 percent in 2011 to 9.95 million units, according to data from the Society of Indian Automobile Manufacturers. The industry body said Jan. 10 it expects deliveries of two-wheelers, including motorcycles and scooters, in the year beginning April 1 will increase 11 percent to 14 percent.
Africa, Latin America

Still, the Indian market is profitable for Hero. Net income at Hero rose 43 percent to 6.13 billion rupees in the quarter ended Dec. 31 and expects to sell more than 6 million units in the fiscal year to March 31, New Delhi-based Hero said on Jan. 19. In the 11 months to February, Hero has sold 5.7 million two- wheelers, it said on March 1.

Hero is looking to begin sales in Africa and Latin America this year, following Bajaj Auto, which sells more than 35 percent of its products overseas and expects to exceed its export target of 1.5 million units in the year ending March 31.

Hero aims to export 1 million units annually in five or six years, Munjal said.

“We’ve been seen as a utility-bike maker, fuel-efficient bikes, and somebody who’s at the lower level of the market, who’s more small-town and rural-market focused,” said Munjal. “So our ambition is to become one of the biggest global two- wheeler players and to do that, you cannot only be in one small segment.”
Following Tata

Hero’s shares declined 3.1 percent to 1,886.95 rupees at the close in Mumbai, the lowest level since Jan. 31. The benchmark BSE India Sensitive Index (SENSEX) dropped 1.6 percent.

“Investors are scared about Hero’s plan of buying Ducati,” said Umesh Karne, an analyst with Brics Securities Ltd. in Mumbai. “Hero will have to take on the burden in terms of Ducati’s debt so initially there may be some pain.”

Indian companies have bought luxury brands and succeeded before. Jaguar, acquired by Tata Motors from Ford Motor Co. (F) in 2008 for $2.4 billion, has helped drive profitability for India’s biggest automaker. Tata’s net income last quarter increased 41 percent to a record 34.1 billion rupees, led by the Jaguar unit, which is generating more than half of the parent’s revenue.

Hero may follow Tata’s lead should the motorcycle maker negotiate a cheap price for Ducati, according to Basudeb Banerjee, an analyst with Quant Broking Pvt.

“If they pay the current market price, it could be negative as Ducati will take at least two years to turn around,” said Banerjee, who’s based in Mumbai. “If they get it a low price, then it could be good for Hero as they will gain technology and also the Ducati brand, which is strong around the world.”

 

[Backbencher]

That would be great achievement for Hero .
They can learn a lot from Ducati .
BTW my mum yesterday bought a pulsar 220 for me !! I am literally starting to love hero !!
Humme hai hero ......lol

 

[Banana]

Mahindra in the Fray.

No Chance for others.

Buy-out group eyes Ducati disposal - FT.com

You are coming to Bombay Baby!

 

[Punjabbi Munda]

My dad knew the Hero owner,in Ludhiana..started from nowhere,had a small factory in Ludhiana,starting from a small company,to one of the biggest in the world.Quite amazing.

 

[blackops]

Mahindra in the Fray.

No Chance for others.

Buy-out group eyes Ducati disposal - FT.com

You are coming to Bombay Baby!

mahindra is even eyeing for saab

 

[Invincible INDIAN]

That would be great achievement for Hero .
They can learn a lot from Ducati .
BTW my mum yesterday bought a pulsar 220 for me !! I am literally starting to love hero !!
Humme hai hero ......lol

Abe yaar, pulsar bajaj ki hai.....aiwe he?

 

[Abhishek_]

let's not jump the gun just yet. they are merely talks of interest; long way from acquisition.

 

[Nakki Nair]

mahindra and bajaj should enter a contract to ride pulsar together.....save the fuel so that tejas can fly more higher.

Yes bro I agree with you. Tejas flying higher can help Obama reach the moon and overthrow thundercats faster. In the meantime, Hu Jintao, Zardari and Madam Sonia can have a nice spa session from He Man and Skeletor.

 

[illusion8]

VW's Audi eyes motorbike racing legend Ducati

FRANKFURT/MILAN (Reuters) - German carmaker Audi is in talks to buy Ducati for its lightweight engine know-how, its racetrack pedigree and the distinctive sound and styling of its motorcycles.

Two sources familiar with the matter said Audi, the premium cars arm of Europe's top carmaker Volkswagen (VOWG_p.DE), was in discussions with the private equity group that controls the Italian firm about a purchase.

A successful deal would extend Audi's long-standing rivalry with BMW BMWG.DEBMWG.DE) to superbikes, and add expertise about high-revving light engines to VW's engineering portfolio, which ranges from cars through heavy trucks to ship engines.

For Audi, whose Ingolstadt headquarters has become a key research and development center for lightweight fuel saving technologies, Ducati's engine technology could add a new development dimension.

Audi is conducting due diligence and a decision about a purchase could come by mid April, one of the sources said.

Volkswagen, Audi and Ducati's main shareholder, Investindustrial, declined comment.

Ducati was founded in 1926, and over the past 60 years it scored 17 manufacturer's World Championship titles and most recently won the 2011 World Superbike Championship title.

On the streets, Ducati counts actors Tom Cruise and Brad Pitt among clients for its distinctive steel-framed machines with the loud, barking engines.

Ferdinand Piech, Volkswagen's current chairman and grandson of VW Beetle creator Ferdinand Porsche, is himself a Ducati owner.

"I LIKE EVERYTHING RED"

Last month, Investindustrial said it was looking for a "world class industrial partner" for Ducati, to help fund overseas expansion.

The Financial Times cited Investindustrial's chairman Andrea Bonomi saying it was looking to sell, and in a report on Tuesday it put the price at about 850 million euros of which 800 million would be acquired debt. Last year a stock market listing for the business was mooted, according to the paper.

Investindustrial is still in talks with other potential investors, including sovereign wealth funds, a person familiar with the matter said. Potential industrial partners include India's Hero MotoCorp HROM.NSHROM.NS).

A formal auction process is not underway, another person familiar with the matter said.

At his annual earnings conference on Monday, VW chief executive Martin Winterkorn dropped a hint that Europe's largest auto maker may be on the lookout to snap up the Bologna-based maker of the "Ducati Monster" bike.

"I like everything that's red," Winterkorn said when asked about Ducati -- a reference to the fire-engine red fuel tanks which have become a hallmark for Ducati bikes.

Ducati would join carmakers Lamborghini, Skoda, Seat, Bentley, Audi and Bugatti, and truck makers MAN and Scania in the VW stable.

VW's Piech has long coveted the Italian company and on repeated occasions lamented missing an opportunity to buy the motorbike maker after it fell on hard times.

In an interview with Frankfurter Allgemeine Sonntagszeitung in June 2008, Piech said VW could learn from Ducati's approach to building lightweight engines.

"A 1 liter engine can produce 200 horsepower," Piech told the paper. "Small engines are also lower from the point of view of fuel consumption. We can learn something here."

Tapping motorcycle expertise is not unprecedented for auto makers. BMW bought Husqvarna Motorcycles in 2007, and built a research and development centre in Cassinetta di Biandronno, 300 kilometers north of Bologna, where Ducati is based.

BMW, which makes the Ducati rival S 1000 RR superbike, on Tuesday forecast it would reach its long-term sales target for cars four years earlier than planned, presenting Audi with a bigger challenge to clinch the crown of becoming the biggest selling premium auto maker.

India's Hero MotoCorp, is on a global hunt for technology partnerships and acquisitions to bolster its models before a agreement allowing the company to use Honda Motor Co's 7267.T7267.T) technology runs out in 2014.

"Hero is in talks with many companies. Ducati is one of them," a spokeswoman for Hero MotoCorp HROM.NSHROM.NS) told Reuters, declining to comment on whether the Indian automaker was interested in a bid for Ducati.

VW's Audi eyes motorbike racing legend Ducati - Yahoo! India Finance