China’s Geely takes share in Aston Martin

ZHEJIANG Geely Holding Group (Geely), China’s largest privately-owned automotive group, has this week announced that it has acquired a shareholding in Aston Martin Lagonda Global Holdings (Aston Martin), representing 7.6 per cent of the ordinary share capital of the high-end British sportscar brand.

The purchase is the latest move by Geely founder and chairman Li Shufu as he seeks to expand his global automobile empire, the Chinese billionaire already boasting a significant portfolio that includes Lotus and Volvo, as well as a 9.7 per cent holding in Mercedes-Benz Group.

Geely has also recently looked to acquire a share in Renault’s engine company and challenge the likes of Tesla’s Elon Musk with a push toward outer space.

In a statement to media this week, Geely CEO Donghui Li said: “We are delighted to announce our investment in Aston Martin and believe that with our well-established track record and technology offerings, Geely Holding can contribute to Aston Martin’s future success.

“We look forward to exploring potential opportunities to engage and collaborate with Aston Martin as it continues to execute its strategy to achieve long term, sustainable growth and increased profitability.”

Geely did not provide a transaction value. However, based on Aston Martin’s closing share price last week, it is estimated that the stake is valued at £7.55 billion ($A13.1b).

According to a report published in Automotive News last week, Aston Martin has also successfully raised £654 million ($A1.13b) in capital to help lower its debt levels and invest in new models.

Aston Martin’s executive chairman, Lawrence Stroll, said he would like to welcome Geely as the company’s newest shareholder. Mr Stroll's investment fund remains the British car-maker's largest shareholder.

The company (Aston Martin) is said to be choosing a partner for its first electric model, which is scheduled to be launched in 2025, and that Geely may be invested in helping to achieve this goal.

Century-old Aston Martin reported an operating loss of £93.4 million ($A161.8b) in 2021. It sold 6200 vehicles that year with China being one its largest markets.

This week’s news comes two-and-a-half years after Geely’s first attempt to secure a stake in Aston Martin. Mr Shufu held preliminary discussions with Aston Martin in January of 2020 about a possible investment in the company, saying the British brand could benefit from a technology-sharing deal such as the one it shares with Lotus.

Separately, and at the same time, it was reported that Chinese battery manufacturer Contemporary Amperex Technology Limited (CATL) also showed interest in acquiring a stake in Aston Martin, however these claims were denied by a CATL representative.