Daimler to get 5% stake in Aston Martin for supplying engines and electronic components

By VCPOST Staff Reporter

Dec 19, 2013 08:11 PM EST

Germany's Daimler AG said it will receive up to a 5% stake in luxury sports carmaker Aston Martin Lagonda Ltd. in exchange for supplying engines and electronic components to the 100-year-old British firm.

Arabian Business, citing an earlier report by Reuters, said that Aston Martin will team up with the German carmaker's high-performance Mercedes-AMG GmbH division to develop a new generation of bespoke V8 engines for its sports cars.

The deal will help Aston Martin spread the cost of developing new fuel-efficient vehicles. It is currently the only global luxury carmaker not attached to a larger manufacturer, the report said.

According to Arabian Business, Daimler will receive non-voting shares in Aston Martin in several steps as the technical partnership progresses. The German carmaker will also get an observer status on the Aston Martin Holdings board as part of the deal. The two companies began negotiating the transaction in July.

Existing Aston Martin shareholders include Italian private equity firm Investindustrial and Kuwait-based Adeem Investment and Prime Wagon, the report said.

Aston Martin has struggled to fund the development of a range of new vehicles, while rivals Bentley and Rolls Royce have the ability to draw on the resources of their parent firms. Bently is owned by Volkswagen, whilst Rolls Royces is controlled by BMW, Arabian Business said.

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