German carmaker Volkswagen has put the 1.5 billion-euro ($1.8 billion) sale of Ducati motorcycles on hold after resistance from German trade unions and internal rifts on strategy, sources familiar with the matter told Reuters.
Ducati is wholly controlled by VW`s luxury brand Audi, which is at odds with the parent over strategy, and a decision to sell the 91-year old business, which is based in the Borgo Panigale district of the northern Italian city of Bologna, needs to be approved by VW`s supervisory board.
Labour leaders at VW, who hold half the seats on the 20-member board, have strongly opposed a sale regardless of price.
VW has told five bidders to hold off making binding bids for Ducati, which it put up for sale in April to help raise cash to fund a strategic overhaul following the emissions scandal at Europe`s largest automaker, the sources said.
The bidders, some of whom expressed astonishment and anger at the way the process had been handled, were ready to pay about 1.5 billion euros for Ducati, the sources said.
VW, Audi and union representatives declined to comment.
Italy`s Benetton family, U.S. automotive firm Polaris Industries and Ducati`s former owner Investindustrial made it to the last stage of an auction in July, along with private equity funds Bain Capital and PAI Partners.
The bids valued the business at 1.3 billion to 1.5 billion euros, representing a multiple of more than 13 times Ducati`s core earnings of about 100 million euros.DIFFERENCES
The auction had been expected to wrap up later this year with binding bids due in October, one of the sources said.
"At this stage it is highly unlikely that negotiations will be resumed this year," one of the sources said, adding bidders were growing impatient.
"There are still differences between VW and Audi that need to be resolved and the unions are far from backing the sale," he said.
A source close to Audi said a reshuffle of VW`s top management board, which swapped four out of seven executives, had slowed the sales process in July, undermining management`s ability to press ahead with the planned divestment.
Another source close to VW said no decision could be taken unless all the parties involved sat down and talked, but no meeting had been scheduled with VW, Audi, the German unions and possibly the Porsche-Piech family, which owns a majority stake in Audi`s parent VW.
This source said Audi was well aware that bidders were getting nervous, but stressed the need for consensus before the sale process could be resumed.
VW is due to hold a board meeting on Sept. 29 although any decision on Ducati`s sale is seen as unlikely, another said.
VW`s head of strategy, Thomas Sedran, told Reuters last month that the German group was in no hurry to find a new owner for Ducati as it was more focused on its multi-billion-euro shift towards electric vehicles and transport services than a divestment.
($1 = 0.8402 euros)
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