The former owner of motorcycle company Ducati has bought a stake in Aston Martin Lagonda.
Italian private equity fund Investindustrial has signed a deal to invest £150m for a 37.5 per cent stake in the British sports car company. The deal cements Aston Martin's existing £100m a year product development programme for the next five years.
Mahindra and Mahindra was previously thought to be the front runner in the deal, offering a significantly greater cash injection. Although Investindustrial has relationships with AMG, a tie-in with Mercedes’ performance arm is not part of the deal. Investindustrial has significant contacts within the industry, according to a spokesman, who referred to Aston Martin's partnerships with other OEMs, including Ford and Toyota.
Investindustrial owned Ducati until earlier this year when it sold the company to Audi for $1.1bn.
Under the new deal, Investindustrial will become a shareholder alongside current majority shareholder Investment Dar and minority shareholders, Dr Ulrich Bez and David Richards. Investindustrial will be a minority shareholder, with four of the nine board seats.
Aston Martin chairman David Richards said: "I am delighted that Investindustrial has decided to become a major investor in Aston Martin. With the support of Investment Dar, we have made substantial progress over the past five years in laying the foundations for success as one of the world’s leading luxury sports car manufacturers.
"Investindustrial’s new investment reflects and sustains the unique position of Aston Martin within the industry. With this partnership and the continued commitment of Investment Dar, we look forward to working with our shareholders as we realise our vision and exciting future plans."
Andrea C. Bonomi senior principal at Investindustrial said: "We are looking forward to working with the management and Investment Dar to achieve a similar transformation and rejuvenation that we achieved with Ducati, by expanding the model range and strengthening the dealership network, throughout the world."
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The long term for Aston Martin
Investment Dar's involvement in Aston Martin was nothing more than a provate equity venture. All that's happened it is hasn't worked out yet (partly because of the recession) and they need someone on board who knows what they're doing. In short they want to sell it on at a profit but that just isn't possible at the moment, so they'll be hoping Investindustrial can perform some of the magic they did with Ducati in order to sell it on - probably to one of the world's big carmakers, who let's face it aren't interested in buying it at the moment given the state its in. In the long term Aston Martin really needs to be owned by an automotive giant to eusure both its survival and continued prosperity.
It's all about the money
I rather it was Mahindra and Mahindra. With revenues totalling over $6 billion last year and along with it's parent group The Mahindra Group over $15 billion and growing expotentially every year as the Indian economy gathers pace I would have thought that AM's future will be better with them.
Crystal ball
It will be interesting to see if Investindustrial can be any more successful in developing a long-term future for AM than any of their forbears............