Audi works to finalize details of deal to buy Lamborghini SpA

Audi works to finalize details of deal to buy Lamborghini SpA

FRANKFURT (Reuters): Germany's Volkswagen AG continued its
automotive shopping spree yesterday when its Audi AG subsidiary
snapped up the Italian high-performance sports car maker
Lamborghini SpA.

Europe's biggest car maker said that it had signed a letter of
intent to take over the Bologna-based Lamborghini, which is 60
percent owned Hutomo "Tommy" Mandala Putra, the youngest son of
former Indonesian president Soeharto, and 40 percent by
Malaysia's Mycom.

Audi hoped to finalize details and close the sale in coming
weeks. Just how much Audi paid for the firm is unknown.

"Audi is dealing with both owners and wants to take over the
whole of Lamborghini," a spokesman for Audi told Reuters.

He added Audi had been approached by Lamborghini's owners with
a view of VW buying the company.

The Lamborghini purchase came hard on the heels of VW's
successful bid for the luxury car maker Rolls Royce Motor Cars
last week.

VW's decision to buy Lamborghini did not come as a surprise to
car industry analysts, who had speculated that VW might be
interested after the management board chairman of VW, Ferdinand
Piech, said he was looking at possible luxury acquisitions.

The stockmarket did not respond particularly well to the news
and shares in VW fell more than one percent on the news. But the
shares still outperformed the Xetra DAX index which was down 1.35
percent at the same time.

"I think it might be a little too much for them to try and
integrate two car makers simultaneously. To successfully do both
is going to cost both time and nerves," he said.

Earlier this month, Soeharto denied reports that he planned to
sell his stake to gain a fresh injection of funds for his PT
Timor Putra Nasional car company.

At the same time Mycom said it was looking to sell its stake.

Audi would become much more international through the purchase
of Lamborghini, while the purchase of the marque would play a
major role in completing Audi's range of luxury sports cars, the
Audi spokesman said.

Lamborghini sold around 200 cars last year, mainly its
"Diablo" model.

Audi saw the purchase as a "long-term investment" and said it
would operate Lamborghini as a wholly owned foreign subsidiary,
along the lines of its Hungarian unit Audi Hungaria Motor Kft,
within the parent structure.

The spokesman said that similar negotiations were going on
with engine maker Cosworth, which it said earlier this month it
would take over from Vickers Plc.