Rumors of Harley-Davidson Buyout
Harley-Davidson, Inc. HOG had its shares surge 7.3% to $54.12 on Sep 21, 2016 as a result of rumor that the company could be acquired by the firm, KKR & Co. L.P. KKR. Rumors of the equity firm positioning themselves to acquire Harley-Davidson had surfaced in 2010 as well as this past July.
Nonetheless, CNBC and Reuters reported Harley-Davidson’s spokesmen as denying any knowledge of a Harley-Davidson buyout and stating the rumors had no merit. Shares of the motor company rose 3.9% and increased shares to $52.42.
Can Harley-Davidson Weather The Storm
H-D is having some tough times as a result of a strong U.S. greenback and fierce competitors. Already feeling the pinch, it’s resulted in a workforce layoff of more than 200 employees and $70 million being spent on advertising and product improvement.
Harley-Davidson also agreed to a $15 million settlement with the EPA recently. This is related to “super tuners” which increased power and also higher emissions. According to the agreement, Harley-Davidson will buy back all of the product and stop future sales of the items. All of these setbacks are adding up financially for the company.
Prices of used motorcycles are falling, new Harley-Davidson sales have fallen and the company is feeling the crunch. This affects the motor company’s income and market share. Management expects stiff competition to affect their retail sales, as other companies depend on discounts and new product lines to boost sales. Harley-Davidson also expects to face some trying times from regional fluctuations in the economy of different markets.
Harley-Davidson is still focused on pushing in foreign markets for eventual growth. The company plans to expand its range of products to increase its customer base in their share of the American motorcycle market. So despite the rumors of a Harley-Davidson buyout once again the motor company continues on with business as usual.
Milwaukee, WI-based Harley-Davidson is the world’s leading designer and manufacturer of heavyweight motorcycles, and related products and merchandise. The company’s products are sold mainly in North America, Europe, Middle East and Africa (EMEA), the Asia-Pacific, and Latin America.