Mercedes-Benz is taking a big stake in Aston Martin

Mercedes-Benz is taking a big stake in Aston Martin. Mercedes-Benz is taking a big stake in struggling British carmaker Aston Martin.

The carmakers have confirmed in statements that Mercedes-Benz will increase its stake in Aston Martin over the next three years from 2.6% to as much as 20%.

In exchange for the new shares, Aston Martin will get access to Mercedes-Benz technologies and components including next generation hybrid and electric powertrains.

Aston Martin, the favorite ride of fictional British secret service agent James Bond, was in a bad way even before the coronavirus pandemic slammed the auto industry.

The company battled weak demand for some of its models and a global auto slowdown before Formula 1 billionaire Lawrence Stroll headed to its rescue in January.

The Canadian billionaire led a group that paid £182 million ($236 million) for 16.7% of the company. Aston Martin then raised an additional £318 million ($412 million) through the issue of new shares.

In May, the company replaced CEO Andy Palmer with Tobias Moers, who had been with Mercedes-AMG since 1994.

Investors remain unconvinced about the turnaround effort. Shares in the firm have collapsed since they were listed in October 2018, a stinging indictment of a carmaker that once sought a valuation on a standard with Ferrari (RACE).

Aston Martin said on Tuesday that it suffered an operating loss of £229 million ($297 million) in the first nine months of the year. The stock has lost two-thirds of its worth so far in 2020. Moers said that the partnership with Mercedes-Benz will be pivotal going forward.

The German brand’s technology “will be fundamental to ensure our future products remain competitive and will allow us to invest efficiently,” he said in a statement.

For Mercedes-Benz, which is owned by Daimler (DDAIF), the deal is an opportunity to burnish its extravagance credentials at a modest price. It said the tech transfer is worth £286 million ($371 million).

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