By Rhys Jones and Jennifer Clark
LONDON/MILAN Dec 7 Aston Martin plans to invest
$1 billion in new products and technology after Italian private
equity fund Investindustrial agreed to buy a minority stake in
the British luxury carmaker.
Investindustrial is buying 37.5 percent for $241 million via
a capital increase agreed with majority Kuwaiti owner Investment
Dar, Aston Martin said on Friday.
The Italian group beat Indian tractor maker Mahindra and
Mahindra in a two-way battle to invest in the company,
whose sports cars were made famous by their appearance in James
Bond spy films
The cash injection will help Aston Martin better compete
with Volkswagen's Bentley and rival UK luxury car
manufacturer Jaguar Land Rover, which was bought by
India's Tata Motors in 2008 and has since seen huge
sales growth, especially in China.
The 99-year-old maker of the DB9 and Vanquish sports cars
has struggled in recent years. Last week, it said it sold 2,340
cars in the nine months to Sept. 30, 19 percent down on 2011.
Investindustrial's senior principal Andrea Bonomi said the
group hoped to transform Aston Martin in a similar way to its
revamp of luxury Italian motorcycle maker Ducati by expanding
Aston's model range and strengthening its global dealership
Owned by Italy's Bonomi family, Investindustrial bought
Ducati in 2006 and sold it for about 860 million euros last
April to Volkswagen's Audi division.
Aston Martin said the deal would enable it to invest in new
products and a technology programme up to 2018.
Bernstein analyst Max Warburton said it looked like Aston's
owners were settling for a temporary fix because they were
unable to attract another car manufacturer to invest at the
price they wanted. "It doesn't look like a long-term solution,"
"This deal doesn't sort scale, access to technology,
emissions or entry to new segments."
The British carmaker is owned by a consortium of Aston
Martin chairman David Richards, Kuwait's Investment Dar and
another Kuwait fund, Adeem Investment Co. U.S.-based Ford,
which sold Aston Martin to them for $770 million in 2007, still
holds a small stake.
Aston Martin said its shareholders' stakes "had been reduced
accordingly" by the capital increase.
Aston Martin, perhaps best known for its classic DB5 sports
car that featured in early Bond movies, makes its cars in
Gaydon, Warwickshire, once part of England's motor manufacturing
The deal comes days after ratings agency Moody's put Aston
Martin's non-investment grade B3 rating under review following a
16 percent fall in the carmaker's third-quarter revenue.
The British company said the deal gave the group an
enterprise value of 780 million pounds, compared with a value of
630 million pounds prior to the agreement.
It added that no agreement had been made on a technical
partnership for Aston Martin with Daimler AG's Mercedes
, as some analysts had expected.
Aston Martin rival Jaguar Land Rover has spent some $800
million over the last five years on marketing and expanding its
dealerships in China. The communist state is now close to
becoming JLR's largest single market.
Aston sells some 15 percent of its vehicles in Asia but
wants to significantly boost its presence in emerging markets.
Investindustrial said it expected to receive clearance for
the deal from competition bodies in the first quarter of 2013.