Daimler Will Take 5% Stake in Aston Martin in New Engine Agreement image

Aston Martin and Mercedes-AMG GmbH division might sign a deal to develop a new generation of the V8 engines for the British automaker.

The agreement might be finalized by the end of this year, and under this deal Daimler will own a 5% non-voting stake in Aston Martin. Three months ago Investindustrial acquired 37.5% of Aston Martin for which it paid $241 million through a capital increase which was approved by the automaker’s majority owner Investment Dar and Adeem Investment.

Investindustrial’s investment, which surpassed the bid offered by tractor maker Mahindra and Mahindra, will assure a new 500-million-pound product development program, which will last five years. This deal will help Aston Martin become a tougher competitor for VW’s Porsche and Bentley units and Jaguar Land Rover.

Under the latest deal, Daimler’s Mercedes-AMG units will supply engines to the British automaker, while Daimler’s Mercedes-Benz unit will continue to provide electronic components. This new agreement might soon replace the Aston Martin’s deal with Ford for engine supply. The US automaker builds V8 and V12 engines for Aston Martin at the Cologne plant, in Germany.

“The opportunity to include content from Mercedes-AMG in our next generation sports cars is, clearly, good news,” Ian Minards, Aston Martin’s product development director, said in a statement. “This points to a very bright future for the company as it starts its second century in business,” he added

Source: Reuters