Chinese holding Geely continues to gain influence in the European auto industry and becomes the third largest shareholder of the British company Aston Martin (full name — Aston Martin Lagonda Global Holdings Plc. Technical cooperation between Aston Martin and Geely is now almost inevitable.
Over its 110-year history, Aston Martin has experienced bankruptcy seven times, and is now going through another period of restructuring amid chronic losses: according to the official reports, the total debt of the company at the end of the first quarter of this year amounted to 868.1 million pounds.
Last spring, Aston Martin changed its CEO (the German Tobias Moers was replaced by the Italian Amedeo Felisa), after which the ownership structure began to change: in the summer, the State Investment Fund of Saudi Arabia (PIF) became a major shareholder of the British company with an 18.7 percent share , in the fall, 7.6% of Aston Martin shares were bought by the Chinese holding Geely.
It is curious that the Geely holding has been trying to get close to Aston Martin since 2020, but other owners rejected his offer, fearing to lose control. Now the company needs not only money, but also ready-made solutions in the electric vehicle segment, in which Geely has already achieved significant success, as can be seen in the examples of its European brands Volvo, Polestar, Lotus, LEVC and smart.
In 2020, it was assumed that Mercedes-Benz would become the main technical partner of Aston Martin, its share in Aston Martin was to increase from 2.6% to 20% by 2023, but after the dismissal of Moers, who headed the Mercedes division before working at Aston Martin -AMG, the paths of the British and German companies parted, and Geely was allowed to take a share.
This week, many media outlets, with no hesitation and with the news of 2020 in mind, wrote that Mercedes-Benz owns a 20% stake in Aston Martin, but this is not so. The official press release about the increase in Geely's stake in Aston Martin from 7.6% to 17% does not mention Mercedes-Benz at all, and the independent MarketScreener resource shows that Mercedes-Benz's current share is a modest 1.95%.
The official press release states that Geely will spend £234m to buy a portion of the shares from the company's current majority owner, Aston Martin Chairman Lawrence Stroll and his investment firm Yew Tree Overseas, and will also acquire a portion of the new shares issued as part of the additional issue with the purpose of attracting investment. Now the top three Aston Martin owners look like this: Yew Tree Overseas — 21%, PIF — 18.7%, Geely — 17%.
The Chinese holding, in addition, receives one non-executive director position on the Board of Directors of Aston Martin and may appoint one representative to the Supervisory Board. The agreement also states that Geely undertakes not to increase its stake in Aston Martin by more than 22% until August 2024, but this restriction can also be lifted if the board of directors makes an appropriate decision. This means that in the coming years, Geely has every chance of becoming the main owner of Aston Martin.
Lawrence Stroll, apparently, does not want to lose control of Aston Martin yet, but without external investment and technology he is not able to lead the company to success . The British company is going to bring its first mass-produced electric car to the market only in 2025, then it needs to effectively scale the business (to reasonable aisles, of course), Geely's experience and money in this sense can become a key resource.