Aston Martin expands deal with Mercedes-Benz in exchange for stake

FILE PHOTO: An Aston Martin logo is pictured at the new factory in Saint Athan, Wales, Britain December 6, 2019. REUTERS/Rebecca Naden

(Reuters) – Aston Martin on Tuesday expanded a deal with Daimler AG to access the German automaker’s technology, including its hybrid and electric drive systems, in exchange for new shares as the struggling British luxury carmaker’s new boss drives changes.

The company will place 250 million new shares with new and existing institutional investors at 50 pence a share, said the 107-year car maker that hired Tobias Moers, former CEO of Mercedes-AMG, to become its boss from August.

The new shares issued would increase the size of Mercedes-Benz’s stake to no more than 20% by 2023 from the current 2.6% in several stages.

“We take another major step forward as our long-term partnership with Mercedes-Benz AG moves to another level with them becoming one of the Company’s largest shareholders,” said Chairman Lawrence Stroll.

The German firm would get the right to nominate one non-executive director to Aston Martin’s board after its first shareholding increase.

The James Bond car maker, which has started deliveries of its first sport utility vehicle, the DBX, reported third-quarter adjusted core loss of 29 million pounds compared with a profit of 43 million pounds last year and revenue that nearly halved to 124 million pounds.

($1 = 0.7673 pounds)

(The story has been refiled to correct typo in paragraph 1)

Reporting by Yadarisa Shabong in Bengaluru; Editing by Arun Koyyur