Geely has doubled its stake in Aston Martin to 17 per cent and will supply technology and components to the luxury-car maker under a new “long-term partnership”, growing the Chinese group’s influence over a company that it has long desired to own.
The Chinese carmaker spent £234mn increasing its holding, becoming the third-largest shareholder after the consortium of investors led by Aston Martin chair Lawrence Stroll, and Saudi Arabia’s Public Investment Fund, and placing it ahead of Mercedes-Benz.
Geely bought 42mn shares from Stroll’s consortium, and was issued with 28mn new shares at 335p each, a substantial premium over Wednesday’s closing share price of 231p. The deal raises £95mn for Aston Martin.
Aston Martin shares on Thursday rose 22 per cent to 283p.
Geely has reached a new agreement with the UK-listed company that will mean it gets a board seat, and it agreed not to increase its holding above 22 per cent until August 2024.
The carmaker has tried to buy Aston Martin several times in the past, including launching a rival bid to Stroll in 2020, and again more recently last summer. It eventually bought a 7.6 per cent stake last September.
Geely chief executive Daniel Li told the Financial Times Future of the Car Summit in London last week that the company “loves the brand” and wanted to “generate synergies” with its current business that includes Lotus and Polestar.
Stroll on Thursday said the relationship with Geely “offers us a deep understanding of the key strategic growth market that China represents, as well as the opportunity to access their range of technologies and components”.
Helping Aston Martin with greater access to China, a market where it has traditionally been weaker, could see Geely open flagship stores for the brand in locations such as Shanghai and Beijing.
Geely is also a big shareholder in Mercedes-Benz, which itself is a significant Aston Martin investor and technology partner.
Geely chair Li Shufu, otherwise known as Eric Li, said: “Our decision to increase our shareholding in Aston Martin reflects our confidence in the company’s growth prospects, its technologies and its management team.
“Since first acquiring our minority holding last September, we have worked collaboratively with executive chairman Lawrence Stroll and his colleagues and now look forward to exploring joint technology synergies and new growth opportunities to help this iconic automotive brand achieve its full potential.”
