Mercedes-Benz to boost its stake in Aston Martin

By Rahul Vaimal, Associate Editor
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Germany-based Daimler AG subsidiary Mercedes-Benz is reportedly increasing its stake in Britain’s Aston Martin brand by up to 20 percent by 2023, making it one of the largest shareholders among British carmakers.

Aston Martin, popular as James Bond’s carmaker, has endured a tough time since it floated two years ago, with its shares losing two-thirds of value this year.

Tobias Moers, the former chief executive of Mercedes-AMG, was hired by the 107-year-old company as its new boss in August.

As part of a larger issue of 250 million shares at 50 pence each, Aston said the rise in Mercedes-Benz’s interest from 2.6 percent will take place in several phases.

The maximum value of the stock given to the German group would be $372.7 million (£286 million), the company said.

The contract will see an existing supply agreement between the two companies extended from 2013 to allow Aston Martin access to key Mercedes technology, including hybrid and electric drive systems.

Lawrence Stroll Aston’s chairman and biggest shareholder said, “We take another major step forward as our long-term partnership with Mercedes-Benz AG moves to another level, with them becoming one of the company’s largest shareholders”.

The London-listed firm said that after its first shareholding raise, the German firm will get the right to appoint one non-executive director to the board of Aston Martin.

Aston said it swung to an adjusted core loss of $34 million (£29 million) in the third quarter, compared to a profit of $50 million (£43 million) last year. Revenue nearly halved to $145 million (£124 million) in the era, it added.

Aston Martin is aiming for an annual capital expenditure of $294 million (£250 million) to $353 million (£300 million) per year between 2021 and 2025. It envisions a production volume of about 10,000 units, revenue of about $2 billion (£2 billion) and a major profit of $588 million (£500 million) in the 2024 to 2025 fiscal years.