German Mercedes-Benz will increase its stake in Aston Martin Lagonda as part of the British automaker's rescue plan.
Mercedes-Benz is set to become the second largest shareholder of Aston Martin. The German giant has announced that it will gradually increase its shares from 5 percent to 20 percent.
The announcement made after the closure of the London stock market described the deal as a "strategic technology deal".
The agreement between the two companies is expected to affect Formula 1 programs as well. Aston Martin will be in F1 as a team next year and Sebastian Vettel will be the brand's global ambassador. Mercedes will be the second largest shareholder, after Lawrence Stroll, with its stake in Aston. Toto Wolff, the F1 team boss of Mercedes, also owns a stake in Aston.
CONVERGENCE BEGAN IN 2013
Mercedes first teamed up with Aston Martin in 2013 and acquired a 5 percent stake in a deal that saw the two companies working on engine development.
Popularly known as James Bond's favorite car company, Aston Martin plans to increase its sales from 5,862 vehicles sold last year to about 10,000 by 2025.
The company also said on Tuesday that it has a long-term strategy to increase revenues to £ 2bn and earn nearly £ 500m in five years.
The first phase of the investment deal will see Mercedes increase its stake to 11.8 percent as part of the £140 million share issue.
In a separate development Tuesday, Aston Martin posted a pretax loss of £ 29 million for the third quarter, from a profit of £ 43m in the same period last year.
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