China’s Geely, controlled by billionaire Li Shifu, to double Aston Martin stake in US$291 million deal
- Geely will acquire a 17 per cent stake in Aston Martin Lagonda Global Holdings to become UK sports car maker’s third largest shareholder
- Aston Martin’s shares rise as much as 25 per cent in early trading in London
As part of a £234 million transaction, Geely will acquire a 17 per cent stake in the company, purchasing 42 million shares from chairman Lawrence Stroll’s Yew Tree consortium along with 28 million new shares, Aston Martin said in a stock exchange filing. Geely will also get the right to appoint one director on Aston Martin’s board.
The British carmaker’s shares rose as much as 25 per cent in early London trading, and were trading 13 per cent higher at 10.45am in London.
Aston Martin has perennially struggled with cash and roped in Saudi Arabia’s Public Investment Fund as a shareholder last year, as Stroll looks to turn the carmaker around and pivot to battery-powered sports cars.
Analysts have in the past said that Aston’s lack of scale and precarious cash balance made it vulnerable.
As part of the agreement with Aston Martin, Geely agreed to a standstill until August 2024 to not acquire shares that will take its stake in the company to more than 22 per cent, the filing said.
Bloomberg first reported in October 2022 that billionaire Li Shifu, who controls Geely, was looking to boost his stake in the carmaker to increase collaboration with the carmaker.
The investment in Aston Martin deepens Geely’s vast footprint in Europe, where it controls Volvo Car and recently increased its stake in French carmaker Renault.
