Aston Martin & AMG Announce Technical Partnership, Daimler to Buy Up to 5% Stake in AM

As part of an announced technical partnership between AMG, the performance subsidiary of Mercedes-Benz and Britain's Aston Martin, Daimler will buy up to a 5% interest in the luxury performance car maker. The agreement will give AM "significant access" to the technical resources of both AMG and its parent. Aston Martin will use those resources to develop V8 engines and have access to Mercedes Benz's electronic architecture and components. Aston Martin product development director Ian Minards said, "We have selected AMG specifically as the basis for this powertrain development process." On behalf of AMG, the performance brand's chief, Ola Kaellenius said that the technical partnership is "proof of AMG's technological and performance expertise, and a real win-win situation for both sides." Aston Martin's engines are currently supplied by Ford, which formerly owned AM, at a Cologne, Germany plant. Aston Martin's V12 engine is based on the architecture of Ford's Duratec V6 engine. Aston's V8 is a hand assembled version of the Jaguar AJ V8 engine, a practice that started when Ford owned both of those companies. Automotive analysts say that the deal helps Aston Martin avoid the substantial costs of not just engine development, but also electronic systems, which have become increasingly important in the auto industry. For Daimler, it gets to amortize some AMG costs and gives it a foothold to take control of Aston Martin later should its current investors want to pull out. Moody's currently rates Aston Martin at B3, non-investment grade. Last year, the Investindustrial group of Italy bought a 37.5% share in the company for $241 million, through a capital increase negotiated with majority owner Investment Dar, a sovereign-wealth fund of Kuwait. Aston Martin is currently the only premier luxury car maker that is not owned by a larger automotive group. In January, Aston Martin announced plans to invest spend $765 over the next four years to keep pace with VAG owned Bentley and Fiat owned Ferrari and Maserati. The UK company has had a rough go of it since the economic crisis of 2008, with a 9% drop in profits in 2012, and a 10% decline in sales, to ~3,800 cars. So far, Daimler and Aston Martin have only signed a letter of intent, with definitive agreements to be inked later this year, pending regulatory approval. Daimler will buy the 5% stake in stages, depending on the progress of the technical partnership, and its stock will be non-voting shares.   from The Truth About Cars http://www.thetruthaboutcars.com

Put the internet to work for you. via Personal Recipe 680102