The Financial Times' Heather West reported today that Bologna, Italy-based Ducati Motor Holdings (NYSE:DMH) would be receptive to a rumored merger with Harley-Davidson (NYSE:HOG).

I find this rumor intriguing. As I wrote recently, H-D has been unsuccessful to date with its Buell brand in establishing a presence in the sport (road racing) bike market, which skews demographically to a younger rider. While Ducati's world-wide sales are minuscule compared to the big four Japanese brands (Honda (NYSE:HMC), Yamaha (OTC:YAMHF), Kawasaki,(OTC:KWHIY), and Suzuki (OTC:SZKMF)) none can match their road racing success, history and reputation for technical excellence.

For example, Ducati has long dominated the World Superbike Championship, motorcycling's version of Formula One racing. Like Ferrari, they are known for technical innovation and cutting-edge performance.

The company's financial status has been unsettled for years. The Texas Pacific Group bought 100% of the company in 1996-98, but has since sold all its shares, mostly to Italian investors. While Ducati appears to have righted the boat in 2006, despite a decline in units sold, the company carries a debt load that will have to be factored into any takeover. It also faces negotiation of a new union contract this year, always a concern for Italian companies. They recently filed to delist from the NYSE, citing cost considerations.

If H-D can make the numbers work, I can see a number of pluses in such a deal. Certainly its dealer network would welcome such an appealing addition to its product line. It could also leverage its existing distribution network, and perhaps manufacturing, to reduce operating costs. Ducati primarily markets its brand through its racing program, which would give H-D exposure where it currently has none.

There is no sexier name in motorcycling than Ducati, and I wouldn't be surprised to see such a deal go into negotiation.