News - Aston Martin
Indian and European suitors for Aston Martin
Kuwaiti investment house negotiating with two bidders for vital Aston Martin stake
26 Nov 2012
ASTON MARTIN’S Kuwait-based majority shareholder, Investment Dar, will reportedly finalise the sale of up to 50 per cent of the British luxury sportscar company this week.
Indian conglomerate Mahindra & Mahindra and European private equity fund Investindustrial are the potential suitors, with Bloomberg reporting that Mahindra has out-bid Investindustrial’s offer of almost £250 million ($A383m).
However, Investindustrial – which earlier this year sold Italian motorcycle company Ducati to Audi – is said to have a valuable technology and parts sharing deal with Mercedes-Benz performance arm AMG on the table.
The AMG link could provide Aston Martin with an avenue for engine supply after its agreement with former owner Ford, which hand-builds V8 and V12 components for Aston at its Cologne facility in Germany, ends next year.
Mercedes-Benz owner Daimler has been previously rumoured to be a likely partner for Aston Martin.
Analysts say that if Mahindra is successful, its association with a prestigious brand like Aston Martin would give it access to new technology and greater visibility in overseas markets.
Mahindra has a desire to diversify its automotive portfolio and expand into overseas markets, having bought and revived ailing South Korean car-maker SsangYong in February 2011.
It also considered acquiring the assets of Saab after the Swedish car-maker went bankrupt and in 2008 was outbid by rival Indian firm Tata when Ford sold its other British company, Jaguar Land Rover, but the company otherwise has had little to do with premium car brands.
Investment Dar is reportedly offering 50 per cent voting rights and a 40 per cent stake in Aston Martin, with the option to increase the stake to 50 per cent.
The Kuwaiti investment house was a major player in the consortium led by David Richards – a British entrepreneur, chairman of Prodrive and former principal of the BAR and Benetton Formula One teams – that bought 90 per cent of Aston Martin from Ford in 2007 for £480m.
Investment Dar’s financial health was reportedly battered in the GFC, worsened by a decline in luxury car sales.
In June last year, Aston Martin raised £304m through a bond issue to refinance its bank loan and secure its financial stability for seven years.
The Financial Times reported that the sell-off by Investment Dar will enable Aston Martin to increase its capital in order to bring in new investors.
Aston Martin must also keep investing in new products with improved safety and lower emissions.
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