Jenna Genio / Audi Press | May 03, 2017 09:31
VW mulling over sale under the duress of fines and the Euro shift to EVs
In the wake of the big 'Dieselgate' emissions scandal and hefty fines they've incurred as a result, plus the European-wide commitment towards sustainable mobility and electric vehicles (EVs), Volkswagen AG finds itself having to adjust. According to a Reuters report, Volkswagen (VW) will have to cut thousands of jobs and shelve numerous programs in order to fund the development of EVs — already exhibited by Audi having pulled out of LeMans and VW's WRC exit.
VW is starting to approach potential buyers of the Ducati motorcycle brand, acquired by Audi in 2012; a final decision about Ducati's sale has yet to be made. Meanwhile, the investment banking firm, Evercore, has been tasked by VW to evaluate such options. VW may consider a stock market flotation for Ducati if sufficient interest isn't gathered.
A source revealed to Reuters that Ducati made annual earnings before interest, taxes, depreciation, and amortization (EBITDA) of roughly 100 million Euros. While the motorcycle manufacture could be valued at 15 times its core earnings at 1.5 billion Euros, a banking insider told Reuters that buyers would likely offer VW an earnings multiple of more than 10.
Ducati could be a desirable asset for those attracted to the brand's identity and prestige, as well as its motorsport victories. Potential buyers could hail from China, India, or the UK. Private equity firms, along with other big motorcycle manufacturers, might also be interested.
Former VW Chairman, Ferdinand Piech's passion for Ducati's design expertise and light engines was seen as the main reason Audi purchased the Italian brand in 2012. Analysts argued that the move had no economic logic to back it up. Now, VW is wondering if similar trophy buyers are willing to do the same.
Back in June 2016, Audi CEO, Rupert Stadler, brushed off rumors that Ducati would be sold off, but a lot can change in a year.