Volkswagen AG's luxury brand Audi is prepared to buy Italian superbike maker Ducati Motor Holding SpA for roughly €860 million ($1.12 billion) including debt, Reuters reported Tuesday.

Ducati's debt liabilities are apparently below $200 million, Reuters reported, citing anonymous sources familiar with the deal.

Ingolstadt, Germany-based Audi has reportedly been in talks with Ducati owner Investindustrial for some time about the purchase, and there have been other interested parties, including the Indian company Hero MotoCorp Ltd., Businessweek reported.

The acquisition of Ducati by Audi would further heighten the competition between VW and its Bavarian arch-nemesis BMW, which already makes BMW and Husqvarna brand motorcycles.

There has been some debate among analysts about whether the Ducati purchase is a good move for VW. Some view the purchase of Ducati as simply a name brand acquisition to expand VW's stable, which already holds 10 brands running the gamut from vanilla VWs to Lamborghini, Bugatti, Scania and MAN trucks.

The Ducati acquisition is driven by VW's passion for nameplates rather than industrial or financial logic, Arndt Ellinghorst, an analyst at Credit Suisse told Reuters.

The addition of Ducati does not seem to have any potential cost savings for Audi or VW. However, VW and Audi may be able to expand the brand's footprint in developing markets.

Investindustrial is expected to announce the sale of Ducati at a shareholders' meeting on Wednesday, according to Reuters.