Aston Martin has no time to die and is saved by Mercedes

Ka time to die? For the James Bond film with this title, the corona crisis was the absolute show stopper. There is no standstill for Aston Martin. The British automaker, which has been supplying 007 with company cars since the 1960s, is to continue to live. It may have a different effect on the stock market, because the price of Aston Martin Lagonda Global Holdings plc (AML) has dropped from £ 19 (1900 pence) to just 31 pence this May since going public two years ago.

The aura of the legendary sports car brand is still big enough that investors of all kinds keep the manufacturer alive – with money and technology. The rescue for the British should come from Stuttgart in the future. Mercedes grants Aston Martin access to future-oriented technologies. There is talk of engines and drive trains, of software and electrical architecture. As soon as the news, which was reported in a partial edition of the FAZ on Tuesday, was public, the price of Aston Martin shares rose by 30 percent.

Both manufacturers are old friends. There has been a cooperation since 2013 and Tobias Moers took over the management of Aston Martin in early summer – the manager who, as long-time AMG boss, was able to transform almost every Mercedes model into a streamlined sports car. As a result, the AMG sub-brand has advanced to become an important source of profit for the Stuttgart manufacturer and is now a mainstay in the future strategy of Daimler’s CEO Ola Källeniuswho was once AMG boss himself.

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The first agreements have already been made

With the delivery of parts and technology to the 007 brand, Mercedes is expanding its own sales base, such as Daimler to explain the deal writes. Payment is made in shares, neither in pounds nor in euros. The cooperation was already backed by shares, although the original 5 percent that Daimler had given seven years ago has shrunk to 2.6 percent due to the IPO and is hardly worth any more on the stock exchange.

Within three years, Mercedes-Benz AG is to take over up to 20 percent of Aston Martin by issuing new shares. In a press release, Daimler puts the value of the entire package at 286 million pounds, i.e. the equivalent of 315 million euros. For a first tranche, with which Mercedes would get a share package of 11.8 percent, specific agreements and prices for components and systems have already been made. For Daimler shareholders, the effects of this cooperation are not yet positive, at least at first glance. On a stock market day that was already black because of the latest corona lockdown plans, the Daimler share lost massively in value.

Currently miles away from reality

For Aston-Martin things are different. Lawrence Stroll spoke of a turning point when he saw a “world-class luxury car maker” and a profitable future for the British partner. The Canadian billionaire and Formula 1 magnate led a rescue operation for Aston Martin months ago with a consortium of investors and regards the agreement with Mercedes as a crucial opportunity to realize its own growth plans.

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In the 2024/2025 financial year, Aston Martin plans to generate around £ 2 billion in sales of around 10,000 cars and generate an operating profit (Ebitda) of £ 500 million. Currently, these plans are miles away from reality. Last year Aston Martin posted a pre-tax loss of more than £ 100 million on sales of £ 1 billion. In the third quarter of 2020, which Aston Martin reported at the same time as the Mercedes cooperation, the operating result (Ebitda) was even negative at £ 29 million with sales of £ 124 million.

When the German racing driver Sebastian Vettel competes in Formula 1 for the Aston Martin team (previously called Racing Point) next year, it will only have something to do with the British automaker: The racing team only has the same investors as Lawrence Stroll on top.


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