A new strategic technology agreement and an enhanced partnership have been announced between Mercedes-Benz AG and Aston Martin.
According to this agreement, Mercedes-Benz AG will grant access to a range of advanced Mercedes-Benz technologies, including next-generation hybrid and electric powertrains, as well as other vehicle components and systems.
Mercedes will grant access to these technologies in exchange for new shares in Aston Martin, issued in several phases over the next three years, up to a total value of GBP 286 million. The current shareholding of Mercedes-Benz AG stands at 2.6 percent of Aston Martin’s common equity. The new shares to be issued would carry the holding of Mercedes-Benz AG to no more than 20.0 percent at most. Mercedes-Benz AG does not intend to increase its Aston Martin shareholding above this stage.
“We already have a successful technology partnership in place with Aston Martin that has benefited both companies. With this newly expanded partnership, we will be able to provide Aston Martin with access to new cutting-edge technologies and components, including next-generation hybrid and electric drive systems. The supply arrangements for these new technologies will be on agreed commercial terms. We look forward to continuing to work together with Aston Martin and we wish the company every success in its next stage of growth.”
Wolf-Dieter Kurz, Head of Product Strategy at Mercedes-Benz Cars
In 2013, Mercedes-Benz AG and Aston Martin entered into strategic cooperation for the supply of AMG V8 engines and the supply of components for the E/E (electrical) architecture. In return, Mercedes-Benz AG received equity participation of 5% in Aston Martin. Following Aston Martin’s IPO in 2018 and various further financing rounds, Mercedes-Benz AG now owns a 2.6% stake.
KEY TERMS OF THE NEW AGREEMENT
Negotiations concerning the expansion of existing cooperation were initiated in 2020.
Aston Martin requested access to certain engines and powertrains as well as powertrain software, E / E architecture, and various other components in the first step. In exchange for additional new shares in Aston Martin, which will be allotted to Mercedes-Benz AG by a Contribution in Kind (‘CiK’), Mercedes-Benz AG has agreed to provide such technology access to Aston Martin. No cash consideration from Mercedes-Benz AG will be included in the arrangement. The supply of systems and components will be on arm’s length terms.
To achieve the maximum agreed shareholding of 20.0 percent in Aston Martin, a total CiK value of GBP 286 million will be needed. The new shares shall be issued in several tranches to Mercedes-Benz AG by 2023, tied to the release of various technology packages.
Main terms and conditions have already been agreed upon for the first technology kit and share tranche. The Tranche 1 technology is valued at GBP 140 million. In exchange for Tranche 1 technology, the shares to be given to Mercedes-Benz AG would raise the shareholding of Mercedes-Benz AG to 11.8 percent. The parties need to agree on the scope of the technology to be made available to Aston Martin, the respective value (‘entry fees’), and the prices of the pieces for the components and systems for further tranches.
The planned continuation and enhancement of the partnership with Aston Martin would result in further sales of Mercedes-Benz AG components and systems, as well as the potential upside of any rise in the valuation of Aston Martin’s enlarged shareholding.
Further details are available at https:/media.mercedes-benz.com/mbsu