Mercedes-Benz will take a 20 per cent equity stake in beleaguered Aston Martin, the iconic British carmaker announced this afternoon.
In exchange for becoming one of Aston Martin’s biggest shareholders, the German firm will give it access to its car design technologies.
Chairman Lawrence Stroll labelled the deal a “transformational moment” for the luxury brand.
It also launched a new business plan, under which it will target £2bn in revenue and £500m in Ebitda by 2025.
Shares in Aston Martin jumped 4.5 per cent prior to the announcement, which came as markets closed this afternoon.
Earlier this year the car firm said that it was planning a complete reset “to enable it to operate as a true luxury company”.
Since listing in October 2018 the company has struggled, with plunging revenues weighed down further by the coronavirus pandemic.
Today Aston Martin also announced that revenue had halved in the third quarter, falling to £124m compared to £244m last year.
The first part of the reset came when a consortium backed by Stroll led a £536m bid for the luxury carmaker, giving the Canadian billionaire a 25 per cent stake in the firm.
Upon acquiring the stake, one of Stroll’s first moves was to replace boss Andy Palmer with Tobias Moers – who used to be chief exec of Mercedes-Benz subsidiary Mercedes-AMG.
Stroll added that the today’s announcement was “truly game-changing”.
“We now have the right team, partner, plan and funding in place to transform the Company to be one of the greatest luxury car brands in the world.”
Wolf-Dieter Kurz, head of product strategy at Mercedes-Benz, said the firm would give Aston Martin access to new cutting-edge powertrain and software technologies and components, including next generation hybrid and electric drive systems.
The new shares will be issued to Mercedes-Benz in a number of stages.
Alongside the deal, Aston Martin announced new financing worth over £1.3bn, comprising a £125m share placing and the issue of over £1bn in notes.