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BIKELAND > FORUMS > DESMOSUPERBIKES.com > Thread: Ducati Merging with Harley Davidson?? NEW TOPIC NEW POLL POST REPLY
fish_antlers


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posted June 12, 2007 07:27 AM        Edited By: Staff on 12 Jun 2007 14:48
Ducati Merging with Harley Davidson??

http://www.bikeland.org/story.php?storyID=32181


quote:
Ducati would consider Harley-Davidson merger 'anytime,' CFO says

By Heather West in New York


Ducati Motor Holding, the listed Italian motorcycle manufacturer, would consider a merger with US-based Harley-Davidson "anytime", said Enrico D'Onofrio, CFO.

A merger with Harley-Davidson would be "totally complementary", he said, responding to speculation in the market that the two firms had been in talks. And while he declined to comment on the speculation, he did say that the two companies are similar in that they create recreational bikes that consumers fantasize about. "People want to buy a dream." Harley-Davidson has an older consumer profile, with an average age of 55, while Ducati owners are about 35, on average. Half of all Ducati owners in the US also own a Harley, D'Onofrio added.

A potential combination with the US company could also help Ducati with procurement, as Harley is a larger company that is able to get better quality products at lower prices. A marriage would also increase distribution opportunities for Ducati, which is a relatively small manufacturer. "In the US, we do not have critical mass," D'Onofrio said. "In this market, you must."

D'Onofrio said Harley could also stand to benefit, as it could be interested in expanding internationally. "The US market is flattening," D'Onofrio said.

Asked if Harley-Davidson has ever visited Ducati's factory in Bologna, the executive said: "Yes, we are good friends." He said Harley visited as recently as two months ago.

Still, D'Onofrio acknowledged that some at the top of the company believe a combination with another company could dilute the Ducati brand, which dates back to the 1920s. But D'Onofrio said it is his opinion that the company could maintain its strong brand identity, even in the case of a strategic buyout.

Ducati faced difficult times in 2005 and 2006, but now has a new shareholder and is focused on reducing fixed costs and increasing margins. The company has decided to limit the number of its entry bikes, and focus on its higher-end and higher-margin motorcycles, D'Onofrio said.

Texas Pacific Group sold its 30% minus one share stake in Ducati in March 2006, after holding it from 1996, to Investindustrial, an Italian private equity firm. The company has also changed its R&D structure, focusing more on racing, and has brought in a former Toyota executive to oversee quality, D'Onofrio said.

The executive estimates that Ducati will be ready to consider a "marriage" in about one- to- three years, or once it meets its goals promised to shareholders. D'Onofrio said Ducati aims to reach EBITDA of greater than 14% and to sell 50,000 bikes per year by the end of 2008. The company is currently at about 15% EBITDA, and sold 32,000 bikes in 2006.

Also as a result of its restructuring, Ducati has reduced its debt to about 30%, and could therefore also consider acquisitions, D'Onofrio said. Ducati once considered a purchase of Moto Guzzi, which has since been acquired by Piaggio. Husqvarna could also be a potential fit, but is likely to be acquired by BMW, and is therefore not really on the market, D'Onofrio said.

He also downplayed the likelihood of another private equity buyout, explaining that after the involvement of TPG and Investindustrial, Ducati now needs to focus on its strategic outlook. "I truly think we need to find an industrial alliance," he said.

"It's clear the market is consolidating. The Japanese own more than 80% of the market," D'Onofrio noted. He cited speculation regarding a Piaggio and Harley-Davidson tie-up, as well as a Piaggio and Ducati combination, which he said could both be logical scenarios. But for Ducati, D'Onofrio said: "If you ask me, the best scenario is Harley."

Ducati has longstanding relationships with both Unicredit and Mediobanca, but D'Onofrio said Mediobanca knows the company best. Ducati is not seeking advisors in the US, but has worked with Merrill Lynch and Morgan Stanley in the past for private placements.

The US and Italy each generate about 25% of Ducati sales, while Germany, UK, France, Japan and the rest of the world bring in 10% each, D'Onofrio said. Investindustrial, BS Investimenti and HOPP together own about 30% of Ducati.

Ducati trades at approximately 10x EBITDA and has a market capitalization of EUR 476m (USD 640m).

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deathpulse


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posted June 12, 2007 09:11 AM        
Now THAT is news!!! ROFL. Tell ya the truth, the 2nd day I had my 1098 out, my buds and I stopped at a Harley dealer to check out the Buells (my bud wants one - so does my GF). When I parked the 1098, all the harley guys came out... i thought I was going to get a beat down for driving a foreign bike to harley. I couldn't have been more wrong! All the guys were drooling over hte 1098 and checking it out. Lots of them said they respected the power and speed of the Italian twins!! go figure!! Fun day!
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zx12adam


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posted June 12, 2007 11:50 AM        
Um...
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NinjaNick


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posted June 12, 2007 12:02 PM        
*insert BARF emotion here*
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worm~hole


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posted June 12, 2007 01:26 PM        
...I hear lotsa HD owners also own BMW bikes
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OddDuc


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posted June 12, 2007 07:44 PM        
It would be more outlets for ducati product. They'll have to add red to the black and orange boutiques. And probably stateside production to feed the dealer chain. They can't supply the chain they have now with the top bikes.
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stevewfl


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posted June 30, 2007 03:38 PM        
quote:
...I hear lotsa HD owners also own BMW bikes


why do I beleive that LMAO
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worm~hole


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posted June 30, 2007 03:56 PM        
...your friends the H.A.s like things Teutonic...white power...make the connection
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stevewfl


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posted July 01, 2007 12:18 PM        
Harley really needs help in the design department, although I'd hate to see duc degraded like that.
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worm~hole


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posted July 02, 2007 03:29 AM        Edited By: worm~hole on 2 Jul 2007 10:37
....you gotta look at the bigger picture and not think the world revolves around sportbikes, because it doesn't (look at the overall sales of sportbikes vs the rest of the type of bikes available out there)...and why would HD need help in the design department?...they obviously know their target audience (new and existing) and cater to them quite successfully year in year out...its all about nostalgia and evolution...you don't really fix what is not really broken...new sales and high resale values used of HD indicate as much...

....I think Harley Davidsons evolve...they don't get redsigned....HD may start a new model, a new line ie. VRods...and the VRods will also evolve..I think .the merger would probably have more of an impact with Ducati and Buell, although the nature of the impact is only speculative on my part at this point since both companies have similar bikes targeting similar target audiences...and I speculate that it would help the sales of either brand via exposure sitting the the mothership called Harley Davidson Dealership...where HD's clients have money to spend and are a moto-adventurist lot willing to try on different things

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stevewfl


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posted July 02, 2007 05:48 AM        
Sometimes I find it quite challenging talking with people who have no clue what is going on around them. And they suggest I "look at the bigger picture".

Harley sales are down, and so is their stock in a time when the stock market has been on fire. Note a 6 month chart below. Another thing - classifying "sportbikes" doesn't equate when all the manufacturers make various model bikes and we are talking about a MERGER in this thread. Maybe visit a GED program or such and perhaps as a result we can better communicate in threads addressing mergers and acquisitions.

Maybe if Harley would get with the times their competitors will quit taking market share huh!? There's your "bigger picture".

Ticker HOG (not "HD" Home Depot as you mention above) sluggish per the 6 month slide below:


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worm~hole


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posted July 02, 2007 11:25 AM        Edited By: worm~hole on 2 Jul 2007 18:29
...hey...are you smacking and being a smart ass or do you want to want to have an intelligent dialogue?...GED indeed ...it so obvious from the text of any of your posts that when it comes to cruisers let alone HD cruisers, you're narrow minded about the purpose of cruisers and the tastes of the riders who buy and enjoy them...you live and breathe sportbikes...well good for you, spanky ....btw, we're on the verge of new 08 model releases...makes sense to me that sales may not be as stellar as the couple of months later after the new models are released...

...and how would YOU help design HD's products for improvement since you put that out there?...........we're waiting................and make sure you don't piss off the HD diehards with your new ideas..................make it viable and NOT some kind of vapor-ware...........................nah, you can't do it cuz YOU have no idea.....figures........kids

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worm~hole


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posted July 02, 2007 11:28 AM        
...and since when do YOU dictate what other people should think and say and what their personal opinions should be...who the fuck do you think you are???....fishantlers????...dude, you can't be fishantlers, but you can be his turd
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stevewfl


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posted July 02, 2007 04:18 PM        
wow, such vulgarity.... why not keep that in the smackhouse...and this thread was about a merger why do you keep bring specific models of bikes...oh- but its obvious you can' talk business huh
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worm~hole


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posted July 02, 2007 06:14 PM        
quote:
Harley really needs help in the design department, although I'd hate to see duc degraded like that.


...then explain your post...

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worm~hole


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posted July 02, 2007 06:16 PM        
quote:
Sometimes I find it quite challenging talking with people who have no clue what is going on around them. And they suggest I "look at the bigger picture".

Harley sales are down, and so is their stock in a time when the stock market has been on fire. Note a 6 month chart below. Another thing - classifying "sportbikes" doesn't equate when all the manufacturers make various model bikes and we are talking about a MERGER in this thread. Maybe visit a GED program or such and perhaps as a result we can better communicate in threads addressing mergers and acquisitions.

Maybe if Harley would get with the times their competitors will quit taking market share huh!? There's your "bigger picture".

Ticker HOG (not "HD" Home Depot as you mention above) sluggish per the 6 month slide below:




...and this...

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worm~hole


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posted July 02, 2007 06:17 PM        
quote:
wow, such vulgarity.... why not keep that in the smackhouse...and this thread was about a merger why do you keep bring specific models of bikes...oh- but its obvious you can' talk business huh


...because HDs and Ducs are specific-type bikes

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