China’s Geely buys 7.6% stake in Aston Martin

Chinese automotive company Zhejiang Geely said on Friday it bought a 7.6% stake in British luxury carmaker Aston Martin, but did not disclose the deal value.

Based on Aston Martin’s closing share price on September 28, the stake is valued at £7.55bn (R133bn).

It was bought by Li Shufu, founder and chairman of Zhejiang Geely, Aston Martin said in a regulatory filing, making the Chinese firm one of the top shareholders in the British carmaker, according to Refinitiv Eikon.

Geely also owns Volvo, Proton and Lotus, and is a significant shareholder of Mercedes-Benz. 

“We look forward to exploring potential opportunities to engage and collaborate with Aston Martin as it continues to execute its strategy to achieve long term, sustainable growth and increased profitability,” Daniel Donghui Li, Zhejiang Geely’s CEO said.

Aston Martin also separately announced the completion of £654m (R13bn) capital raise.

In July the British luxury carmaker announced a capital raising that will see Saudi Arabia’s Public Investment Fund (PIF) become its second-largest shareholder with an almost 17% stake. PIF’s £78m (R1.5bn) investment, together with a £575m (R11.5bn) rights issue, will allow the 109-year-old company to lower its debt and invest in new models.

PIF will own a 16.7% stake in Aston Martin, behind the 18.3% holding chairman Lawrence Stroll’s Yew Tree will have. German carmaker Mercedes-Benz owns about 9.7%.

For Aston Martin, the preferred ride of fictional secret agent James Bond which has gone bankrupt seven times in its history, the investments mean it can secure its long-term future.

Stroll, a Canadian billionaire businessman, took over Aston Martin in 2020 as a company in deep trouble, with Covid-19 lockdowns and the disruption to global supply chains slowing its recovery.

Reuters