Indian firm Hero to buy Ducati?

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The boss of India’s biggest motorcycle firm Hero MotoCorp has confirmed his company has discussed the possibility of buying Ducati according to a report issued by business press Bloomberg.

Hero managing director Pawan Kant Munjal is reported to have said: “Lots of people have been coming to us with Ducati: Not one banker but many bankers. We’re talking to a lot of people. Not just Ducati, whoever comes to us, we talk to them.”

Hero MotoCorp and Honda recently ended a 26-year-old cooperation with Hero now looking around for technology gains through acquisitions and partnerships.

Hero is reported to have cash reserves of £650m which is roughly the same amount as current Ducati owners, InvestIndustrial, is thought to be hoping to raise from the sale of the Italian firm.

InvestIndustrial boss Andrea Bonomi recently said: "Ducati is now a perfect company but the further growth it requires needs the support of a world-class industrial partner. This year, we will work towards that partner."

Investindustrial is a private-equity firm which has overseen the complete overhaul of the financial and product line-up on offer by the Italian bike firm which is reporting a big increase in bikes sales to around 42,000 in 2011.

The Indian motorcycle market is booming with a 15% increase in sales in 2011 to almost 10 million overall with sales of larger capacity machines now increasing as riders have more money to spend.

Munjal added: “We’ve been seen as a utility-bike maker, fuel-efficient bikes, and somebody who’s at the lower level of the market, who’s more small-town and rural-market focused.

“So our ambition is to become one of the biggest global two- wheeler players and to do that, you cannot only be in one small segment.”

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Andy Downes

By Andy Downes

Former MCN Senior Reporter