German car giant to take 20% stake in Aston Martin
Mercedes-Benz is set to take a 20% stake in Aston Martin as part of a £1.25bn rescue package to boost the struggling luxury car brand.
The German firm will become a supplier of engines and electric power trains to Aston Martin in a £286m deak which will also see its stake built from 2.3% to owning a fifth of the West Midlands firm.
A caveat in the deal is that if Aston Martin’s share price dips below Mercedes’ entry price, Aston will have to pay out for the new tech.
Industry analysts say it could lead to Mercedes launching a takeover deal for one of the last British independent car makers.
David Bailey, an automotive industry expert at Birmingham university, told The Telegraph: “Aston is too small to survive on its own and is dependent on Mercedes technology.
“This arrangement gives them 20% so they don’t have outright control but Aston’s reliance on Mercedes technology gives it control in that respect. At the right price, they could purchase what is a very cool brand.”
Laurence Stroll, the owner of Aston Martin, is also buying up shares so that he remains the largest shareholder ahead of Mercedes.
Gaydon-based Aston Martin announced yesterday that in the first nine months of this year it sold 2,752 cars, generating turnover of £270m and a £308m pre-tax loss.