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Italian firm takes 37.5 percent stake in Aston Martin
Well, the long-rumoured ‘sale’ of Aston Martin has happened, and it turns out to be nothing of the kind. The majority of the shareholders who bought the company from Ford in 2007 are still in. It’s just that their shares have been diluted by a capital injection of £150m from the Italian fund Investindustrial for a 37.5 percent stake.
Aston has said it will spend £100m a year on R&D for the next five years, but actually this is the same plan it announced some months ago. Securing it will be a huge fillip for the company and its staff. (Presumably then, that earlier announcement was made when the money wasn’t quite available to carry it out…)
Worryingly, £100m a year won’t buy you much new-car development or tooling. The company has spent almost that amount every year for the past several years, a time when there has been no all-new engine or platform. So before long the company will still likely have to look for technical partnerships. AMG-Mercedes engines and other systems have been widely rumoured, but nothing has been said officially. You could do worse than have an AMG engine in your Aston of course. They do a pretty fine job for Pagani.
For the past few years the company has sold 4000-4500 cars a year. In 2006 it sold over 7000. At that time it was owned by Ford, which had paid for the VH platform which still, albeit in evolved forms, underpins all the range bar the Cygnet.
Ford sold Aston in 2007 to a consortium of investors including Kuwaiti funds The Investment Dar and Adeem Investment Co, and Aston Chairman David Richards and CEO Ulrich Bez. That sale valued the company at £479 million. Today, with the capital increase from the new investor, the figure has risen to £780 million, but of course the original owners’ stakes have been correspondingly diluted: they now own just 62.5 percent between them.
Investindustral has motor industry pedigree. It invested in Ducati from 2006, and put in new management with a plan to invest in fresh bikes and cut costs. In April it sold out to Audi - reputedly tripling its money. Andrea Bonomi, Senior Principal at Investindustrial, wants more of the same here. He said: “We are looking forward to working with the management and Investment Dar to achieve a similar transformation and rejuvenation that we achieved with Ducati, by expanding the model range and strengthening the dealership network.” But it’s unlikely such a quick return is on the cards at Aston, given the likely cost of modernising a platform that Ulrich Bez said in 2007 would last until 2015.
So the management plan for Aston continues without a major change in direction. But there is the view that it’s unlikely the long-term ownership is settled, because it’s in the nature of these investment funds to move on after a time - either to take the profit or to escape from a mounting loss.