Daimler to Take 4% Stake in Aston Martin

Daimler AG's Mercedes-AMG unit is expected today to confirm it has reached a deal with Aston Martin Lagonda Ltd. to supply the company with engines in exchange for an initial 4% stake in the British sports car maker, the Financial Times reports.

Mercedes-AMG and Aston Martin agreed in July to partner on powertrains and technology. They said at the time they expected to finalize the deal by year-end.

Daimler will gain observer status on Aston Martin's board, according to the FT's unidentified sources. They say the German company will increase its holding to 5% of non-voting shares as the partnership expands into such areas as electronics and other components.

The deal will give the boutique carmaker access to Daimler's AMG performance operation and save it the cost of developing its own V-8 engines. The British company has said it hopes to increase its worldwide sales to 7,000 units by 2016 from about half that volume last year.

Kuwait's Investment Dar bought Aston Martin in 2007 but has struggled with financial problems that prevented it from injecting fresh capital to help Aston Martin implement its five-year, 500 million (€600 million) product development plan.

Last December the British company sold a 37.5% stake in itself to London-based private equity firm Investindustrial, raising 150 million. The FT says Investment Dar and Investindustrial will own 58.2% and 36% of Aston Martin, respectively, after Daimler gains its 4% stake. The remaining 2% of the company is held by individuals.