LeftLaneNews

Audi to buy Ducati next month?

The famed motorcycle company is scheduled to trade hands soon.

Last month, Leftlane reported that the owner of Italy's Ducati had put the brand up for sale for a nice and even â,¬1 billion ($1.3 billion).

At the time, rumors circulating around the media indicated that AMG, Volkswagen, and India's Mahindra & Mahindra were the troubled company's most likely suitors.

It turns out that the rumors were not entirely false: a new report published today by England's Car Magazine indicates that the motorcycle maker will likely wind up in the hands of Volkswagen-owned Audi.

Audi has reportedly signed an agreement that gives it first rights to buy the brand. The deal is valid until the middle of April, so Audi should have ample time to finalize all of the details.

An unidentified source interviewed by Car Magazine mentioned that Audi is not likely to offer more than â,¬100 million ($131 million) for Ducati, significantly less than what its owner is hoping to get. In exchange for the lower offer, Audi will promise to pay back all of Ducati's debt.

Aud's interest in Ducati is not as random as it might seem, and the company has previously voiced its desire to enter the motorcycle world. At one point it considered reviving Horex, a German company that shut down in 1956, but the lack of any brand recognition whatsoever proved to be an insurmountable obstacle.

Debts aside, Ducati has a good reputation in the motorcycle industry, and some claim that its image is similar to that of Audi. Long before there was talk of selling the brand, Andrea Bonomi, Ducati's current owner, referred to it as the "Audi of the two-wheeler world."

If the deal with Audi falls through and owner Andrea Bonomi is unable to sell Ducati to a private company, he will turn to Deutsche Bank and Goldman Sachs for help in holding an initial public offering for the company in Hong Kong.

Ducati sold about 40,000 motorcycles last year, which gives it approximately 9% of the global sports motorcycle market. The brand has fallen on tough times lately and the company's debt is said to equal about 1.7 times its earnings before interest is factored into the equation