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Mercedes May Raise Stake in Aston Martin to 20%


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Daimler’s Mercedes-Benz unit is further opening its tech candy store to British luxury car maker Aston Martin.

The deal will give the iconic British company access to Mercedes select hybrid and electric powertrains and a range of other components and electronics.

Parts for Equity

Mercedes will supply as much as $374 million in components over three years. The goods will be paid for in the form of new Aston Martin shares that could raise Mercedes’ existing 2.6% stake in the British company to a maximum of 20%.

Mercedes emphasizes that the agreement involves no cash transfers. The German company adds that it has no interest in raising its holding beyond 20%.

The in-kind deal expands a partnership launched in 2013 by a similar arrangement. That’s when Mercedes agreed to begin swapping AMG V-8 engines and various electrical components for 5% equity of the British company. (Subsequent financial moves by Aston Martin, including an initial public offering two years ago, diluted Mercedes’ stake to the current 2.6%.)

What It Means

Like other niche carmakers, Aston Martin can’t afford to go it alone in developing such features as electrified powertrains, connectivity and autonomous driving.

Deals like this one are a cost-effective way for the 107-year-old carmaker—which has been in and out of bankruptcy seven times—to stay in the game.

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