Daimler has announced that the Mercedes-Benz Group will increase its ownership stake in British automaker Aston Martin by 2023. By then its share will have increased to 20 percent from the current 2.6 percent.
The move will make Mercedes-Benz one of the company's major shareholders.
For Aston Martin, this is a blessing, as the company has been experiencing a worrisome decline over the past two years, since it went public. Its shares have lost two-thirds of their value this year.
This past August, the company appointed Tobias Moers, former CEO of Mercedes-AMG, to the same position at Aston Martin.
The transition from 2.6 to 20 percent ownership by Mercedes-Benz will be gradual. The shares issued to the German group will have a maximum value of £286 million ($372.7 million USD) at completion, Aston Martin said.
Evidently, this will lead to increased sharing between the two firms. Most importantly, Aston Martin will have more access to key Mercedes-Benz technologies, including hybrid and electric propulsion systems.
" 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,” said Lawrence Stroll, president and principal shareholder of Aston (and the driving force behind the recruitment of Tobias Moers).
The German automaker will have the right to appoint a non-executive director to Aston Martin's board of directors after its first shareholding increase, the London-listed company said.
Aston Martin, which has just begun deliveries of its first SUV, the DBX, said Tuesday that it incurred losses of £29 million in the third quarter, compared with a profit of £43 million last year. Revenues were nearly halved to £124 million in the same period.
The British automaker hopes to ramp annual production up to approximately 10,000 units, and revenues up to about £2 billion as well as adjusted core profits of £500 million by fiscal 2024 or 2025.