Indian firm thought to be front runner in Aston Martin bid

INDIAN manufacturing giant Mahindra & Mahindra looks to be in the driving seat to become a substantial investor in Midland-based sports car firm Aston Martin.

Reports in India suggest a deal could be tied up later this week that would see M&M take a significant interest in the Gaydon operation. Rumours about the size of the investment have ranged from £120 to £200m.

It appears that the firm, which lost out to Tata Motors over the 2008 acquisition of Jaguar Land Rover, will edge out Italian private equity fund Investindustrial, which has also emerged as a serious bidder for a stake in the sports car business.

Aston Martin has declined to comment on the matter but speculation has been growing for some time that the business was if not up for sale, then ripe for fresh investment.

The speculation suggested that M&M may eventually take a 50% stake in the business although it will likely start at around 40% with the option to inject further cash into the business.

Aston Martin is currently owned by a Kuwaiti consortium which acquired the business from Ford in 2007 for £479m.

M&M is thought to have been bitterly disappointed to have missed out on JLR, particularly because of the technology it would have given it access to in order to improve its off-road vehicles.

The prestige of being a significant player in such an iconic British business is also thought to be a contributing factor to its interest now.