Daimler will take 5% stake in Aston Martin in cooperation pact

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BERLIN (Bloomberg) -- Daimler will own as much as 5 percent of Aston Martin as part of a deeper agreement to share technology with the British sports-car maker.

Daimler's Mercedes-AMG high-performance division will develop V8 engines with Aston Martin's for Aston's next-generation models, the manufacturers said today in a joint statement.

Daimler, which builds Mercedes-Benz vehicles, will receive shares without voting rights in the non-cash deal. The stake will rise as the cooperation develops.

"By taking a stake, Daimler is showing a commitment to work with Aston Martin long term," said Frank Biller, an analyst with LBBW in Stuttgart. "Aston Martin gets a strong partner, but the two need to be careful that they don't end up competing with one another."

Aston Martin, the only global luxury-auto producer that doesn't belong to a larger manufacturing group, is seeking to limit spending on new models as the maker of the 189,995-euro ($260,000) Rapide competes with Volkswagen Group's Bentley and Fiat Group's Ferrari and Maserati. AMG makes the similarly priced SLS gull-wing supercar.

Mercedes brand ranks third in worldwide sales behind BMW's namesake marque and Volkswagen's Audi nameplate. The cooperation with the U.K. maker of cars featured in James Bond movies gives Daimler a toehold in the ultra-luxury segment after it shuttered the unprofitable Maybach brand in 2011.

Volkswagen's Bentley has expanded its lineup into sports cars such as the Continental GT Speed to challenge Gaydon, England-based Aston Martin. The VW division announced plans on July 23 to build the world's most expensive sport-utility vehicle. BMW's Rolls-Royce is also pushing into more performance-oriented models with the $234,000 Wraith coupe.

AMG, based in the Stuttgart suburb of Affalterbach, is known for hand-made engines embossed with a signature badge of the technician who assembled it. The division makes the manufacturer's most expensive cars. The all-electric version of the SLS supercar tops the scales costing 416,500 euros.

Win-win deal

"This agreement is a real win-win for both sides," Tobias Moers, head of Mercedes-AMG, said in the statement. Daimler will have observer status on Aston Martin's board.

In addition to the engine agreement, the companies are in talks for Daimler to provide electronic components to Aston Martin and are investigating other areas of cooperation. Today's agreement between the carmakers formalizes an initial accord from July.

Aston Martin laid out plans in January to invest 500 million pounds ($819 million) over the next four years.

The carmaker, which turned 100 this year and sold 3,800 vehicles in 2012, is backed by London-based Investindustrial, a private- equity fund whose previous assets include high-end motorcycle maker Ducati, which Audi bought last year.

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