Last checked at (Sharecast News) - Shares of Aston Martin Lagonda surged on Wednesday after Mercedes-Benz said it would be lifting its stake in the company to 20% over the next few years.
Mercedes, which announced the news after the market close on Tuesday, said it had entered into a "new strategic technology agreement and an enhanced partnership" with Aston Martin.
The agreement will see Mercedes grant access to a range of advanced Mercedes-Benz technologies, including next generation hybrid and electric powertrains, as well as other vehicle components and systems. Access to these technologies will be granted in exchange for new shares in Aston Martin, issued in several stages over the next three years, up to a total value of £286m.
Mercedes currently has a 2.6% stake in Aston Martin, having entered into a strategic cooperation for the supply of AMG V8 engines in 2013.
Wolf-Dieter Kurz, head of Product Strategy at Mercedes-Benz Cars, said: "We already have a successful technology partnership in place with Aston Martin that has benefited both companies. With this new expanded partnership we will be able to provide Aston Martin with access to new cutting-edge technologies and components, including next generation hybrid and electric drive systems.
"The supply arrangements for these new technologies will be on agreed commercial terms. We look forward to continuing to work together with Aston Martin and we wish the company every success in its next stage of growth."
At 0820 GMT, Aston Martin shares were up 15% at 62.75p.
CMC Markets analyst Michael Hewson said: "The deal, it is hoped, will break the boom and bust cycle that has been a staple of this iconic UK brand. Mercedes will be supplying the technology behind new hybrid and electric power units; however, it also gives them a potential foothold in what is an iconic global brand in a deal, that in the longer term could see the brand subsumed under the Mercedes brand in a manner similar to the way BMW has kept the Mini brand alive."
26 Jul 2023 07:18
Aston Martin narrows losses as sales motor
(Sharecast News) - Luxury car maker Aston Martin Lagonda narrowed losses and maintained annual guidance as strong demand boosted revenue.
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