Currently reading: Geely acquires 7.6% stake in Aston Martin

Chinese giant taking stake completes British firm's transformative £654 million funding round

Chinese vehicle manufacturing giant Geely has acquired a 7.6% stake in Aston Martin, completing a round of funding in which the British firm raised £654 million.

Geely, which owns LEVC, Lotus, Lynk&Co, Polestar, Volvo and half of Smart, was rumoured to be considering a stake in Aston Martin as far back as 2020, before Canadian billionaire Lawrence Stroll's Yew Tree consortium took control at Gaydon.

More recently, Aston Martin revealed that it had rejected a proposed £1.3 billion investment package from Atlas Consortium - a group led by Geely and Investindustrial, the Italian owner of Morgan

At the time, Atlas's offer was said to have "markedly overestimated the company's new equity capital requirements, would have been heavily dilutive for existing shareholders and comprised a number of execution obstacles".

Now Geely joins other high-profile shareholders in Aston Martin, including Saudi Arabia's Public Investment Fund (PIF), which took a 16.7% share for £78m; Yew Tree, which retains a 19% stake; and Mercedes-Benz, which most recently held a 9.7% stake but invested further in this latest funding round to boost its share back up. 

It hasn't been confirmed how much Geely – China's largest private car maker – paid for its 7.6% share in the 109-year-old British sports car maker.

Aston martin dbs superleggera 2018 rt hero front

Aston Martin revealed plans for a huge £654m funding round in mid-July, with the aim of lowering its debt (posted at £1.28bn in June) and solidifying its future plans.

Some £335m came from Stroll, Mercedes and the PIF, with the rest to be raised in a subsequent rights issue, which has just been completed. 

The firm will use the capital to achieve its long-term objectives of 10,000 wholesales, £2bn of revenue and £500m adjusted EBITDA by 2024/25.

Executive chairman Lawrence Stroll commented: "I'm delighted that we have successfully completed this transformational capital raise, which significantly strengthens our financial position and enhances our pathway to becoming sustainably free cash flow positive.

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"Along with Amedeo [Felisa, CEO] and the leadership team, we're fully focused on unlocking the significant shareholder value creation potential of this ultra-luxury British performance brand.

"I would like to thank our existing shareholders for their continued support in reaching this important milestone. The Yew Tree consortium's shareholding now stands at 19% following its full participation in the rights issue and additional investment through the capital raise. I would also like to thank Mercedes-Benz for their investment and the strong long-term partnership we've created.

"In addition, I would like to thank the Public Investment Fund, one of the leading global investment funds, which has become a new anchor shareholder with a 18.7% stake in the company.

"Finally, I would like to welcome Geely Holding, who have today announced that they have become a shareholder."

Geely CEO Daniel Donghui Li said: "“We're delighted to announce our investment in Aston Martin and believe that with our well-established track record and technology offerings, Geely Holding can contribute to Aston Martin’s future success.

"We look forward to exploring potential opportunities to engage and collaborate with Aston Martin as it continues to execute its strategy to achieve long term, sustainable growth and increased profitability.”

It has yet to be revealed whether Geely's involvement in Aston Martin could extend beyond financial backing.

Aston Martin will launch its first electric car in 2025 but hasn't yet confirmed whether Mercedes will supply the basic architecture that underpins it, as it does with powertrains and infotainment for the firm's current ICE models. The two firms do have an agreement in place for the supply of electric drivetrains, however.

The PIF's acquisition of a stake in Aston Martin raised the intriguing possibility of the firm partnering with American EV maker Lucid – in which the PIF also holds a share – on EV architecture. 

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And Stroll recently hinted at the potential for collaboration with Croatian EV specialist Rimac - perhaps on a low-volume halo EV in the mould of that firm's 2000bhp Nevera hypercar.

It remains to be seen whether Geely's involvement in Aston Martin opens up an avenue for Gaydon to explore the use of hardware from elsewhere in the Chinese company's portfolio.

Today's announcement has sparked speculation that Geely-owned Lotus and Aston Martin could ultimately partner for the development of premium sporting EVs, particularly as the latter plans to build a low-volume electric hypercar and Lotus has already done so, in the form of the 2000bhp Evija

Felix Page

Felix Page
Title: Deputy editor

Felix is Autocar's deputy editor, responsible for leading the brand's agenda-shaping coverage across all facets of the global automotive industry - both in print and online.

He has interviewed the most powerful and widely respected people in motoring, covered the reveals and launches of today's most important cars, and broken some of the biggest automotive stories of the last few years. 

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Symanski 30 September 2022

Strange for Geely to take a stake in Aston Martin.   They could just wait 18 months and buy it out of administration.

 

This rights issue only buys them more time before failure, and that failure is not dealing with the fact that Marek Reichman designs don't sell.

 

They're betting the company, again, on Reichman designing desireable cars.   Something he's successfully failed to deliver time after time.   The updates for the 2023 model line probably won't change that.

 

Reichman has seen three CEO and two rescue packages.   Yet nobody had done what Aston needs to save itself: Sack Reichman.

 

John W 30 September 2022

I completely agree. Marek Reichman needs to go. His designs are in a way interesting and flamboyant, but they don't sell. And the interior design looks so cheap compared to something like Bentley. If someone wants a flashy car there are much better options from Lamborghini, Mclaren etc.

Aston Martin should be about elegance, minimalism and beauty. Not about shouting the loudest (they will always lose that battle).

Aston Martin should have gone down the Porsche 911 route and just kept modernizing the beautiful DB9.