Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Billionaire Lawrence Stroll shifts Aston Martin into the fast lane

Stock MarketsJan 31, 2020 06:02AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. A worker cleans an Aston Martin Vantage car at Brussels Motor Show

By Costas Pitas

LONDON (Reuters) - Canadian billionaire Lawrence Stroll has agreed to buy up to 20% of Aston Martin and rename his Formula One team after the 107-year-old company famed for being fictional secret agent James Bond's car of choice.

A decline in sales of Aston Martin's luxury sports cars since it floated on the London Stock Exchange in October 2018 has put the company's shares and finances under sustained pressure, forcing it to seek help.

Under the deal announced on Friday, Stroll will pay 182 million pounds for a 16.7% stake which could rise to 20% upon completion of the company's plan to raise a total of 500 million pounds, including a rights issue from exiting shareholders.

Aston Martin shares surged as much as 30% after the announcement and were 18% higher at 1038 GMT.

The brand, which is mainly owned by Italian and Kuwaiti private equity groups, has come late to the lucrative sports-utility vehicle (SUV) market and has struggled to keep up with rivals owned by major global carmakers.

Aston Martin had also held talks with Chinese carmaker Geely, which makes Volvos, but it wanted to instigate more fundamental change than the plan outlined on Friday, a person familiar with the talks told Reuters.

Aston Martin Chief Executive Andy Palmer said the consortium led by Stroll, who is behind the Racing Point F1 team and owns a fleet of vintage Ferraris, will bring several benefits.

"He brings with him his experiences and access to his Formula One team," Palmer told Reuters.

"We've talked a lot in the past few years about wanting to be clearly rooted in luxury and obviously Mr Stroll knows an awful lot about luxury."

Stroll will join Aston Martin's board as executive chairman, replacing Penny Hughes, who will step down.

Under Friday's agreement, Racing Point will become the Aston Martin F1 works team from the 2021 season. Stroll's 21-year-old son Lance joined Mercedes-powered Racing Point last year from Williams (NYSE:WMB) and has Mexican Sergio Perez as team mate.

Stroll, who made his money through investing in fashion brands such as Tommy Hilfiger and Michael Kors, has been involved in Formula One and motor racing for years and also owns Canada's Mont-Tremblant circuit in Quebec.

'DEMAND OVER SUPPLY'

Carmakers of all sizes are using alliances, partnerships and mergers as ways to share the cost and challenge of meeting new emissions regulations, electrifying model ranges and competing on new technologies such as autonomous driving.

The car sector has been hit by a decline in sales in China and a slump in diesel sales in Europe, prompting several automakers to post disappointing results, but Aston has also suffered as a small player.

Rivals such as Bentley, which is owned by Volkswagen (DE:VOWG_p), and Rolls-Royce (LON:RR) Motor Cars, a subsidiary of BMW, benefit from being part of major carmaking companies as they can share costs and expertise.

But despite more stringent emissions rules coming in over the next few years, Aston Martin said plans to invest in electric vehicles will now be delayed beyond 2025 as part of cost-cutting measures.

The consortium led by Stroll is likely to include several other people such as JCB Chairman Anthony Bamford, entrepreneur Andre Desmarais, Michael de Picciotto, telecoms investor John McCaw and Hong Kong fashion sector investor Silas Chou, all of whom have worked with Stroll before.

"I look forward to working with the board and management team... to continue to invest in the development of new models and technologies and to start to rebalance production to prioritize demand over supply," said Stroll.

Billionaire Lawrence Stroll shifts Aston Martin into the fast lane
 

Related Articles

Facebook changes its company name to Meta
Facebook changes its company name to Meta By Reuters - Oct 28, 2021 7

By Elizabeth Culliford and Sheila Dang (Reuters) -Facebook Inc said on Thursday it would rebrand as Meta, a name change that comes as the company battles criticisms from lawmakers...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email