Sports car maker Aston Martin has secured a new deal with German rival Mercedes-Benz which could see the latter increase its share in the brand to 20 per cent.
The move is part of a technology partnership between the two aimed at sparking a turnaround at Aston and will represent a huge leap for Mercedes from its current shareholding of 2.3 per cent.
The deal is aimed at rapidly growing Aston Martin's trade to sell around 10,000 vehicles by 2025 and will give it access to Mercedes’ engine and powertrain technology.
Aston said it was proposing to issue new shares to Mercedes up to a maximum value of £286 million and the first stage will see Mercedes increasing its stake to 11.8 per cent as part of a £140 million share issue.
Last year, the company sold 5,862 vehicles and has seen demand come under pressure this year as a result of the coronavirus pandemic.
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Aston Martin, which is headquartered in Warwickshire and has a major plant in South Wales, said it was aiming to grow revenues to £2 billion and record earnings of around £500 million in five years' time.
It comes months after Lawrence Stroll, part owner of the Racing Point Formula One team, led a takeover of Aston and became its executive chairman in April.
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Separately, Aston will also receive a £125 million investment in new shares from a group of investors including Mr Stroll who will maintain his positions as the company’s largest shareholder.
He said: "This is a transformational moment for Aston Martin.
"It is the result of six months of enormous effort to position the company for success to capture the huge and exciting opportunity ahead of us.
"We take another major step forward as our long-term partnership with Mercedes-Benz moves to another level with them becoming one of the company's largest shareholders.
"Through this new expanded agreement, we secure access to world-class technologies to support our long-term product expansion plans, including electric and hybrid powertrains and this partnership underpins our confidence in the future."
Chief executive Tobias Moers, who used to be chief executive of Mercedes’ AMG high-performance division, added: "This expansion of our partnership is a critical step towards achieving our goals.
"The capabilities of Mercedes-Benz technology will be fundamental to ensuring our future products remain competitive and will allow us to invest efficiently in the areas that truly differentiate our products."
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Wolf-Dieter Kurz, head of product strategy at Mercedes-Benz Cars, said: "We already have a successful technology partnership in place with Aston Martin that has benefited both companies.
"With this new expanded partnership, we will be able to provide Aston Martin with access to new cutting-edge powertrain and software technologies and components, including next generation hybrid and electric drive systems.
"Access to this technology and these components will be provided in exchange for new shares in Aston Martin."