Eicher Motors close to gaining Italian superbike Ducati for $1.8-2 billion

Published: Wilson Clark

On: Sep 2017

Eicher Motors, creaters of Royal Enfield Bullet motorbikes, is supposedly close to making a required offer to gain Italian superbikes Ducati for nearly $1.8 b to $2 b. The contract is being prized at 14 to 15 times Ducati's earnings before interest, taxes, decrease and amortisation (EBITDA) of about 100 m euro.

The contract, if fructifies, will start Siddhartha Lal led company spreading globally and gain permission to technology.

Volkswagen has previously tasked investment banking boutique Evercore to check probability alternatives involving a sale of the Ducati brand. This is which its Audi division gained for around 860 m euros in year 2012.

In year 2016, Ducati sold 55,451 points, so clocking sales of 721 m euro. The Italian super bike company has more than 780 dealers all over 90 countries.

In similarity, Royal Enfield sold 6.50 lakh units in Financial Year 2017. Hence it is currently the world's most beneficial motorcylce company with current market limit standing at Rs 87,223.50 crore.

The sale process may need to deal with delays as Volkswagen's German business union has different the sale process criticizing that Ducati's trade has little synergy with the rest of the core works. The member leaders account for half the chairs on the 20 member board.

In the month of May, Royal Enfield said it have a strategy to invest Rs 800 crore. This investment will be during this financial time on variety of activity activities. The activities involve its upcoming built-up facility near Chennai and new product development.

"We will be investing Rs 800 crore in Financial Year 2017-18 towards our new developing facility at Vallam Vadagal near Chennai. The product creation has 2 technical centers in the UK as well as India and towards market growth," Lal had said in a report.

The new plant will be exactly to be operational by August 2017 taking the joint capacity of Royal Enfield to 8, 25,000 motorcycles in 2017-18.

During the 4 quarter of the previous financial year, Royal Enfield declared its best ever ability, selling 178,345 motorcycles, up 20.8 per cent over 147,618 motorcycles sold in the same period previous year.

The two wheeler maker also declared its largest ever quarterly revenue from operations at Rs 1,888 crore for the 4 quarter expired 31 March, a growth of 23.2 per cent over the related period previous year.