Mercedes May Raise Stake in Aston Martin to 20%
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.
The little car that could still can. And this time as a car that not only gets great fuel economy, but which has ride and handling that makes it more than an econo-box (and its styling is anything but boxy).
Once the playground of exotic car makers, the definition of a niche vehicle has expanded to include image vehicles for mainstream OEMs, and specialist models produced on high-volume platforms.
A class-action lawsuit has been filed against General Motors Co. over claimed flaws in the company’s 8-speed automatic transmission used in 2015-2019 model rear-drive vehicles.