Will Harley and Ducati Create a Transatlantic Motorcycle Empire?

Automotive giant Volkswagen is selling its top shelf Italian motorcycle producer subsidiary, Ducati. Up until now, the known bidders have been Indian motorcycle company Bajaj Auto and a number of buyout firms. But now Harley-Davidson has entered the bidding, and the prospect of a Harley-Davidson and Ducati is impressive. The combination of the two companies could create a Transatlantic motorcycle empire, combining Harley tradition with Ducati performance. Reuters reports:

A deal with Harley-Davidson would bring together the maker of touring bikes like the Electra Glide that are symbolic of America with a leading European maker whose high-performance bikes have a distinguished racing heritage.

Milwaukee-based Harley-Davidson has hired Goldman Sachs to work on the deal, one source familiar with the matter said, adding tentative bids were expected in July.

Volkswagen, whose Audi division controls Ducati – maker of the iconic Monster motorbike – is working with investment boutique Evercore on the sale which will help it fund a strategic overhaul following its emissions scandal.

Based in the northern Italian city of Bologna, Ducati was on the wish list of private equity funds KKR (KKR.N), Bain Capital and Permira, which are all working on the deal, said the sources who declined to be identified as the process is private.

Ducati was launched in 1926 as a maker of vacuum tubes and radio components and its Bologna factory remained open in World War Two despite being the target of several bombings.

Ducati racers have won the Superbike world championship 14 times, with Carl Fogarty and Troy Bayliss its most successful riders.

Harley-Davidson, which commands about half the U.S. big-bike market, was founded in Milwaukee, Wisconsin at the start of the last century and was one of two major American motorcycle manufacturers to survive the great depression.

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