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TRADE UNION SOLIDARITY SCUPPERS DUCATI DISPOSAL

According to global business information specialist Bloomberg, the Audi division of Volkswagen Group has abandoned plans to sell off its Ducati subsidiary. News of this move came after opposition from Germany’s IG Metall trade union, which has a strong presence on the VW supervisory board, and emerged following a full board meeting on Friday 29 September.

Bruno Papignani, regional head of the Italian FIOM CIGL union representing Ducati’s workforce in Bologna, revealed the decision in a phone interview with Bloomberg. “Ducati chief executive Claudio Domenicali told us on Friday that the VW supervisory board had decided to halt the sale process,” said Papignani. “IG Metall sustained and helped Ducati workers in their request to remain inside the VW Group.”

Prior to this abrupt retreat, VW had assembled a short-list of five preferred bidders during the summer, advised by merchant bank Evercore, and intended to pick a winner in October. These included two leading US contenders — private equity giant Bain Capital and powersports manufacturer Polaris Industries. The Benetton family holding company Edizione and private equity firm Investindustrial, Ducati’s former owner, were both in the running too, competing for a return to Italian parenthood. Analysts reckoned the starting guide price was around £1.5bn, approximately double the figure VW had paid for Ducati in 2012.

An early sign that takeover deal prospects were diminishing was visible on the New York Stock Exchange during the final week of September. As reported by BDN, shares in Polaris had been gaining ground sharply throughout the month, based on common knowledge of its involvement. But then they suddenly began to lose value.

However, in the longer term, Ducati’s position is still unsecure. As Bloomberg pointed out, a strategic asset review in the wake of VW’s hugely expensive “dieselgate” scandal identified that it had almost no overlap with other sections of the sprawling VW automotive empire. Failure to get rid of what was perceived as a peripheral vanity purchase after months of effort is a major snub to management at Audi, VW’s largest profit contributor.

There are also likely to be repercussions from aggrieved preferential bidders, all of whom were enticed into spending very large amounts of money on due diligence. 

 

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