PLEASE GOD NO!!! Ducati to merge with Harley???? - TwoWheelForum: Motorcycle and Sportbike forums
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post #1 of 39 (permalink) Old 06-16-2007, 10:27 PM Thread Starter
 
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PLEASE GOD NO!!! Ducati to merge with Harley????

ZOMG
Buy a ducati before the revs get cut in half and old yuppies start hanging tassles and crap on them
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Ducati would consider Harley-Davidson merger ‘anytime,’ CFO says
By Heather West in New York

Published: June 12 2007 06:44 | Last updated: June 12 2007 06:44

Ducati Motor Holding, the listed Italian motorcycle manufacturer, would consider a merger with US-based Harley-Davidson “anytime”, said Enrico D’Onofrio, CFO.

A merger with Harley-Davidson would be “totally complementary”, he said, responding to speculation in the market that the two firms had been in talks. And while he declined to comment on the speculation, he did say that the two companies are similar in that they create recreational bikes that consumers fantasize about. “People want to buy a dream.” Harley-Davidson has an older consumer profile, with an average age of 55, while Ducati owners are about 35, on average. Half of all Ducati owners in the US also own a Harley, D’Onofrio added.

A potential combination with the US company could also help Ducati with procurement, as Harley is a larger company that is able to get better quality products at lower prices. A marriage would also increase distribution opportunities for Ducati, which is a relatively small manufacturer. “In the US, we do not have critical mass,” D’Onofrio said. “In this market, you must.”

D’Onofrio said Harley could also stand to benefit, as it could be interested in expanding internationally. “The US market is flattening,” D’Onofrio said.

Asked if Harley-Davidson has ever visited Ducati’s factory in Bologna, the executive said: “Yes, we are good friends.” He said Harley visited as recently as two months ago.

Still, D’Onofrio acknowledged that some at the top of the company believe a combination with another company could dilute the Ducati brand, which dates back to the 1920s. But D’Onofrio said it is his opinion that the company could maintain its strong brand identity, even in the case of a strategic buyout.

Ducati faced difficult times in 2005 and 2006, but now has a new shareholder and is focused on reducing fixed costs and increasing margins. The company has decided to limit the number of its entry bikes, and focus on its higher-end and higher-margin motorcycles, D’Onofrio said.

Texas Pacific Group sold its 30% minus one share stake in Ducati in March 2006, after holding it from 1996, to Investindustrial, an Italian private equity firm. The company has also changed its R&D structure, focusing more on racing, and has brought in a former Toyota executive to oversee quality, D’Onofrio said.

The executive estimates that Ducati will be ready to consider a “marriage” in about one- to- three years, or once it meets its goals promised to shareholders. D’Onofrio said Ducati aims to reach EBITDA of greater than 14% and to sell 50,000 bikes per year by the end of 2008. The company is currently at about 15% EBITDA, and sold 32,000 bikes in 2006.

Also as a result of its restructuring, Ducati has reduced its debt to about 30%, and could therefore also consider acquisitions, D’Onofrio said. Ducati once considered a purchase of Moto Guzzi, which has since been acquired by Piaggio. Husqvarna could also be a potential fit, but is likely to be acquired by BMW, and is therefore not really on the market, D’Onofrio said.

He also downplayed the likelihood of another private equity buyout, explaining that after the involvement of TPG and Investindustrial, Ducati now needs to focus on its strategic outlook. “I truly think we need to find an industrial alliance,” he said.

“It’s clear the market is consolidating. The Japanese own more than 80% of the market,” D’Onofrio noted. He cited speculation regarding a Piaggio and Harley-Davidson tie-up, as well as a Piaggio and Ducati combination, which he said could both be logical scenarios. But for Ducati, D’Onofrio said: “If you ask me, the best scenario is Harley.”

Ducati has longstanding relationships with both Unicredit and Mediobanca, but D’Onofrio said Mediobanca knows the company best. Ducati is not seeking advisors in the US, but has worked with Merrill Lynch and Morgan Stanley in the past for private placements.

The US and Italy each generate about 25% of Ducati sales, while Germany, UK, France, Japan and the rest of the world bring in 10% each, D’Onofrio said. Investindustrial, BS Investimenti and HOPP together own about 30% of Ducati.

Ducati trades at approximately 10x EBITDA and has a market capitalization of EUR 476m (USD 640m).
But then again...I would buy a cruiser if it had a desmo in it.......wait no I wouldn't.
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post #2 of 39 (permalink) Old 06-16-2007, 10:35 PM
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I'm not buyin' it...
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post #3 of 39 (permalink) Old 06-16-2007, 10:37 PM Thread Starter
 
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Originally Posted by onesickpsycho View Post
I'm not buyin' it...
Not buyin their bikes? Or not buying the story? It's the Financial Times, pretty reputable paper from what I understand. They use big words and stuff, convinced me.
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post #4 of 39 (permalink) Old 06-16-2007, 10:39 PM
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Not buyin their bikes? Or not buying the story? It's the Financial Times, pretty reputable paper from what I understand. They use big words and stuff, convinced me.
I already have one of their bikes... I am not buyin' the story...
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post #5 of 39 (permalink) Old 06-16-2007, 10:42 PM Thread Starter
 
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I already have one of their bikes... I am not buyin' the story...
Ahhh gotcha. Forgot Buell was "technically" a Harley. That is one bike I would deff consider buying.
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post #6 of 39 (permalink) Old 06-16-2007, 10:52 PM
 
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post #7 of 39 (permalink) Old 06-16-2007, 11:01 PM Thread Starter
 
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post #8 of 39 (permalink) Old 06-16-2007, 11:16 PM
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WTF? it states- Harley is a larger company that is able to get better quality products at lower prices.

hows come they leak oil still.... and cost a flippin arm and a leg?????

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post #9 of 39 (permalink) Old 06-17-2007, 11:40 AM
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WTF? it states- Harley is a larger company that is able to get better quality products at lower prices.

hows come they leak oil still.... and cost a flippin arm and a leg?????
Everyone I have known who has bought a Harley in the past 10 years has had ZERO problems with them... Let's see... That's probably 20 people, a total of 30 or so bikes...

Whether or not you like them, saying Harley puts out a crap product is just false... Fit and finish are superb, reliability is spot on, and chrome anything ain't cheap...
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post #10 of 39 (permalink) Old 06-17-2007, 01:45 PM
 
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a Duc/HD merger would be a horrible thing. just think of how much MORE expensive a ducati would be. probably double the price they are now.

HD makes some nice stuff, its just completely overpriced and I dont care for spending that much. Ducati, well expensive but REALLY REALLY nice bikes.
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post #11 of 39 (permalink) Old 06-17-2007, 02:13 PM
 
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the reasons they are looking at a merger is to extend sales breadth, and reduce prices on parts acquisition through Harley's larger negotiation potential due to their size.

this is the same as Ford buying Aston Martin. Its not like ducati's are going to start showing up with harley parts. Its strictly financial.
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post #12 of 39 (permalink) Old 06-17-2007, 03:04 PM
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a Duc/HD merger would be a horrible thing. just think of how much MORE expensive a ducati would be. probably double the price they are now.

HD makes some nice stuff, its just completely overpriced and I dont care for spending that much. Ducati, well expensive but REALLY REALLY nice bikes.
Apples and oranges... Ducati is for sportbikes, what HD is for cruisers... and both start at around the same $$$.

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Originally Posted by ptowntsi View Post
the reasons they are looking at a merger is to extend sales breadth, and reduce prices on parts acquisition through Harley's larger negotiation potential due to their size.

this is the same as Ford buying Aston Martin. Its not like ducati's are going to start showing up with harley parts. Its strictly financial.
Right... so Ducati's could actually get cheaper... Not likely, but possible.
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post #13 of 39 (permalink) Old 06-17-2007, 03:10 PM
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I like the idea. that is all

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post #14 of 39 (permalink) Old 06-17-2007, 03:19 PM
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I like the idea. that is all
, but I'll believe it when I see it... I cannot think of any downfall to this merger...
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post #15 of 39 (permalink) Old 06-18-2007, 08:01 AM
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IM going to have to raise the on this one. It will never happen.
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post #16 of 39 (permalink) Old 06-18-2007, 09:49 AM
 
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Interesting Reas but
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post #17 of 39 (permalink) Old 06-18-2007, 12:02 PM
 
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harley has a trademark sound and feel. it is completely the opposite market for ducati. this is a bean counter deal that will benifit the share holders. mergers are good, it reduces overhead (lay off redudant resources: employees).

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post #18 of 39 (permalink) Old 06-18-2007, 12:13 PM
 
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this will bring down the price of a Ducati while ensuring product integrity... whats the problem here?
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post #19 of 39 (permalink) Old 06-18-2007, 12:16 PM
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this will bring down the price of a Ducati while ensuring product integrity... whats the problem here?
Are you sure about that?
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post #20 of 39 (permalink) Old 06-18-2007, 12:22 PM
 
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oops, relace price with value



(haha this was a 2 part joke)
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