Geely acquires 7.6% stake in Aston Martin

China’s single largest privately-owned automotive technology group Zhejiang Geely Holding Group Co. (Geely) has successfully acquired a 7.6% stake in British luxury sportscar manufacturer Aston Martin Lagonda (Aston Martin).

This was reportedly confirmed through an official press statement released by the Chinese conglomerate dated Sept 30. Though Geely didn’t specify a transaction value, its acquisition did occur as part of the Aston Martin brand’s recent capital raising effort that saw it raise US$732 million (approx. RM3.49 bilion+).

The deal expands Geely founder Li Shufu’s reach into legacy auto brands. Presently, Geely already owns the Volvo Cars brand plus its Polestar sub-brand, Lynk&Co, Zeekr, Lotus, and the London Electric Vehicle Company (LEVC). The firm also holds a 50% stake at Smart, and a 9.69% stake in Daimler (parent to the Mercedes-Benz brand).

Closer to home, Geely also holds a 49.9% stake in national carmaker Proton.

“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,” said Daniel Donghui Li, Geely Holding Group CEO.

The exec continued further by noting that the firm looks 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”.

Earlier this year, Aston Martin Lagonda had rejected a proposal from Geely and InvestIndustrial for an equity investment, declaring "there is no basis for further discussion” whilst also arguing that the proposed deal was not an "attractive funding option or value creation opportunity for existing shareholders."

Aptly, discussion did continue after which, thus leading both to the landmark announcement made yesterday by the Chinese giant. With that, Geely’s acquisition could grant the British firm access to its parts bin and perhaps spur the development of future models.

Crucially, Geely’s acquisition could also help Aston Martin strengthen its future following the recent investment made by the Saudi Arabia-based Public Investment Fund (PIF) in July this year. However, it’s also worth noting that Geely’s share of Aston Martin remains smaller than the stakes owned by chairman Lawrence Stroll (18.3%), PIF (16.7%), and Daimler (9.7%).

Though Aston Martin declined to comment on the Chinese firm’s acquisition, it did say it was welcoming the company on board as a shareholder nonetheless.