Buzzing stock : Eicher shares jump 2.5% on buzz of acquiring Ducati

Eicher Motors is racing up to acquire the Italian superbike maker ‘Ducati’ for $1.8–$2 billion. Following the news, shares of Eicher Motors rose 2.5% to post a high of Rs 32,856 on the BSE. 

To prepare for the bid, Eicher is in talks with global consulting firms and investment banks ahead of the September-end deadline. Since earlier this April, Volkswagen (VW), whose Audi-division controls Ducati, has been working with investment bank Evercore to sell this brand.

Eicher Motors is a leading player in the Indian automotive space and owns the Royal Enfield (RE) motorcycle brand. Some major synergies will materialise, based on expected sharing of technologies, engineering and distribution network between Eicher and Ducati. It will also provide Eicher Motors access to higher capacity engines and best practices in manufacturing. It will help the company in expanding its global footprint and improve its reputation and international standing. Eicher will also have an opportunity to tap into its extensive distribution and business network.

The US motorcycle maker Harley-Davidson and India’s Bajaj Auto are among other companies in the race to bid for Ducati. Volkswagen hopes to raise between 1.4 billion and 1.5 billion euros from the sale of Ducati, valuing it at 14-15 times its EBITDA of about 100 million euros.

Eicher Motors stock ended the day at Rs 32,786.40, up 2.33 per cent on the BSE. Its 52-week high was Rs 32,856.