Aston Martin Partners with Mercedes-Benz AG

Aston Martin has partnered with Mercedes-Benz AG in a joint agreement to share engineering, technologies, design, and production. The full text of the press released over the signature of Tobias Moers, Chief Executive Officer of Aston Martin Lagonda is printed below.

Aston Martin announced partnership with Mercedes-Benz AG

Aston Martin now has everything in place to become one of the greatest luxury car brands in the world.

The transformation of Aston Martin has begun. Since joining Aston Martin this summer, it has been my ambition to build on the vibrant history of this unique brand and deliver the next generation of exhilarating products as we enter this new transformational era in Aston Martin’s history.

We have made significant progress already and last week, we announced that we have strengthened our long-term relationship with Mercedes-Benz AG, providing us with access to advanced technologies that will enable us to continue designing, engineering and manufacturing the most beautiful cutting-edge cars across the world.

We have also updated our plans for the business, incorporating the benefits of this enhanced partnership and we are targeting delivery of significant growth, an important part of which will be expanding our product portfolio, so these are indeed exciting times for all of us.

The expansion of our partnership with Mercedes-Benz AG is a critical step towards achieving our goals for Aston Martin. The capabilities of Mercedes-Benz AG technology will be fundamental to ensure our future products remain competitive and will allow us to invest efficiently in the areas that truly differentiate the products that we can offer to you.

We now have in place the right team, partner, plan and funding to transform Aston Martin to expand our product portfolio and roll out a range of products that exceed the expectations of our customers.

We have great ambitions for Aston Martin and I look forward to keeping you updated on our journey to become one of the greatest luxury car brands in the world.

Statement from Mercedes-Benz AG

We already have a successful technology partnership in place with Aston Martin that has benefited both companies. With this new expanded partnership, we will be able to provide Aston Martin with access to new cutting-edge powertrain and software technologies and components, including next generation hybrid and electric drive systems. Access to this technology and these components will be provided in exchange for new shares in Aston Martin. These new shares will be issued to us in several stages, taking our shareholding up to a maximum of no more than 20.0% of the common equity. The supply arrangements for these new technologies will be on 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

Financial Investment

Subject to shareholder approval of the Strategic Cooperation Agreement and resolutions pertaining to the new equity, alongside satisfaction of anti-trust conditions in Germany and the UK (in relation to the Strategic Cooperation Agreement) and customary underwriting conditions, the proceeds from the new equity and notes are expected to be available to the Group together with the refinanced RCF in December 2020.

The New Financing comprises:

  • An equity placing comprising of 250,000,000 new ordinary shares to be placed with new and existing institutional investors at 50p per ordinary share (the “Placing”). This Announcement should be read in conjunction with the separate announcement by Aston Martin issued today relating to the Placing;
  • An issue by Aston Martin Capital Holdings Limited, a subsidiary of Aston Martin, of £259 million equivalent in aggregate principal amount of 13.5% second lien split coupon notes due 2026, together with detachable warrants to be issued by Aston Martin with the right to subscribe for a number of its ordinary shares, which will represent 5.00% of the diluted issued share capital of Aston Martin following the proposed Mercedes-Benz AG share issuances;
  • An issue by Aston Martin Capital Holdings Limited, a subsidiary of Aston Martin, of £840 million equivalent in aggregate principal amount of first lien notes due 2025; and
  • Commitments of £87 million with respect to the Company’s revolving credit facility and extending the maturity to 2025.

The New Financing and the proposed Mercedes-Benz AG share issuance will also require the publication of an FCA-approved prospectus, expected to be published in mid-November, in connection with the shares issued under the Placing and the Strategic Cooperation Agreement.

Note: Press release courtesy of Aston Martin Lagonda.

Staff

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