Billionaire Lawrence Stroll takes major stake in Aston Martin
Canadian secures 16.7% stake in British car maker, sparking major revamp of firm's long-term plans; Racing Point F1 team to be rebranded as Aston Martin
A consortium led by billionaire Lawrence Stroll has bought a 16.7% stake in Aston Martin for £182 million - sparking a major revamp of the firm's future product plan.
The deal, confirmed this morning through a filing with the London, also includes a £318 million cash infusion through a new rights issue, giving the British car maker a £500 million boost.
Stroll also owns the Racing Point F1 team, which under the terms of the new deal will be rebranded as the Aston Martin F1 works team from 2021 onwards. Aston has pledged to launch its Valkyrie hypercar this year, committed to a revised mid-engined car strategy and revealed it will delay the launch of its electric vehicles, including the relaunch of the premium Lagonda brand, until after 2025.
Aston Martin deal at a glance
Lawrence Stroll leads investment consortium, becomes Aston Martin chairman
CEO Andy Palmer stays on
Job and cost cutbacks to follow
Aston business plan revised
Valkyrie will be launched this year
Mid-engined Valhalla will follow
Mid-engined strategy to continue, launching 2022
Lagonda launched delayed until at least 2025
Electric RapidE project suspended
Stroll's Racing Point F1 team to be rebranded Aston Martin from 2021
What Stroll's investment means for Aston Martin
Stroll beat Chinese car maker Geely, the owner of Lotus and Volvo, a part-owner of Smart and a significant shareholder in Daimler, to the deal after a decision to take Stroll's investment was agreed at a board meeting last night.
To secure the 16.7% stake, the consortium led by Stroll, Yew Tree Overseas Limited, will buy 45.6 million new ordinary shares in Aston Martin Lagonda, at a price of £4 per share. The consortium also includes JCB chairman Anthony Bamford, former Power Corp Canada boss Andrew Desmarais and Hong Kong fashion investor Star Chou.
The £500 million investment will include £55.5 million of short-term funding from Stroll to improve the immediate liquidity of the company, which will be refunded once the full share placing is finalised. The firm said the proceeds from the investment will be used to “improve liquidity and finance the ramp up in production of DBX and turnaround of the company’s performance.”
In a statement confirming the deal, Aston Martin Lagonda said the move would “strengthen its balance sheet to necessarily and immediately improve liquidity and reduce leverage” following “the disappointing performance of the business through 2019”.
Aston Martin was floated in 2018 with a valuation of £4.5 billion, but based on today's share issue is currently worth around £1bn.
As part of the investment, Stroll will join the Aston Martin board in the role of executive chairman, with the consortium also gaining the right to appoint a second board member.
What the Stroll deal means for Aston's future product plan and F1
According to the Aston Martin release, the current technology partnership between Aston Martin and Red Bull Advanced Technologies “will continue until Aston Martin Valkyrie is delivered.” There had been questions as to wether the partnership between the two firms on the hypercar would continue with new investors in place, and it is unclear if Red Bull's involvement in the mid-engined Valhalla project will continue unabated.
Aston Martin currently sponsors the Red Bull F1 team – and will continue to do so in 2020 – but has thereafter agreed a 10-year deal under which Racing Point will become the official works Aston squad. The deal includes a five-year sponsorship agreement starting in 2021.
Stroll has also been linked to a deal to buy the Mercedes works team from the manufacturer at the end of this season, as first reported by Autocar. The German firm is understood to be considering the future of its F1 arm beyond the coming season. It is believed today's deal does not necessarily mean Stroll is out of the running to buy the squad.
Due to Aston Martin’s recent struggles, the firm has also agreed a ‘reset business plan’ to raise its performance, which includes both cash generation and changing its product plan. The reset plan includes delaying investment in electric vehicles until beyond 2025, including delaying the relaunch of the Lagonda brand – scheduled for 2022 – until after that date. The Rapide E electric car project has been “paused pending a review”.
There remains a commitment to deliver on its range of mid-engined cars currently being developed, starting with the Valhalla in 2022.
The immediate priority will be on launching the DBX later this year, with the firm saying it has received 1800 orders to date. It will then update the Vantage in the Spring - including with a Roadster version – and start Valkyrie deliveries later this year. The firm will also seek to trim costs by £10 million per year.
The mid-engined Vanquish will now be revealed after the Valhalla in 2022, while the firm will also develop a “fuel efficient, modular V6 engine with hybrid capabilities”, due to be introduced from the mid-2020s.
The firm also says special models will continue to be a key part to its plan, with one ‘heritage special’ and two ‘contemporary specials’ delivered each year.
