BERLIN -- Audi is in talks to buy Ducati Motor Holding, a maker of luxury motorbikes, from owner Investindustrial, according to two people familiar with the matter.
Audi, which has the right of first refusal on a purchase until mid-April, is considering a total price of about 850 million euros ($1.12 billion) for the Italian company, said one of the people, who declined to be identified discussing private negotiations.
Ducati's total liabilities are less than 200 million euros, a spokesman for Investindustrial said on Tuesday, declining to be identified by name, citing company policy.
Audi has the right of first refusal on a purchase until mid-April.
Buying Ducati would add a motorcycle maker to parent Volkswagen's nine-brand empire and include products such as the $28,000 Superbike 1199 Panigale S Tricolore.
VW Group Chairman Ferdinand Piech first publicly expressed interest in buying Ducati in April 2008, eventually losing to Investindustrial.
Piech, who has said he drives Ducatis himself, said a few years ago he regretted not having acquired the brand back when it could have been bought "for peanuts."
In an interview with Frankfurter Allgemeine Sonntagszeitung in June 2008, Piech said VW could learn from Ducati's approach to building lightweight engines.
"A 1 liter engine can produce 200 horsepower," Piech told the paper. "Small engines are also lower from the point of view of fuel consumption. We can learn something here."
Industry watchers are skeptical about the benefits of buying Ducati.
"You really have to push the envelope to see obvious benefits for a car company to own a motorcycle business," said Erich Hauser, a London-based analyst at Credit Suisse Group. One could be forgiven for seeing this as "just another attempt by VW in empire building," he said.
Ducati sold about 42,000 bikes last year. The company posted a 39 percent increase in earnings before interest, taxes, depreciation and amortization to 93 million euros in 2011, said a person familiar with the financial figures, who declined to be named because the results have not yet been released. Revenue rose 20 percent to 480 million euros.
Investindustrial, a Milan-based private equity company, may hold an initial public offering of Ducati in Hong Kong this year or sell it to a rival, two people familiar with the plans said last month. Earlier this month Investindustrial said it was looking for a "world class industrial partner" for Ducati.
Ducati was delisted from the Milan exchange in 2008.
Audi must still do due diligence on the potential deal, the people said.
Volkswagen CEO Martin Winterkorn said on Monday at the carmaker's annual meeting that he keeps his eyes open to what's for sale on the market, when asked about whether VW was interested in buying Ducati.
Christine Ritz, head of VW investor relations, said the carmaker doesn't comment on market speculation.
Audi and Investindustrial declined comment.
Hero MotoCorp Ltd., India's biggest motorcycle maker, said March 5 that Ducati is one of the assets it's examining as it looks for acquisitions to expand overseas.
BMW, which already makes motorcycles under the BMW brand, said last month it is not interested in Ducati.
Daimler said it isn't planning to buy Ducati. "We're very happy with our existing cooperation between AMG and Ducati," said Marc Binder, a Daimler spokesman. "We're not interested in a takeover of the company."
Ducati, which was founded in Bologna in 1926, sells its Superbike, Monster, Streetfighter, Hypermotard, Multistrada and the new Diavel in 65 countries.
Sources: Bloomberg and Reuters