Two weeks ago it was reported that Aston Martin’s biggest shareholder (64 percent), Investment Dar, were shopping for a potential buyer. Faced with an Islamic bond of R42-billion and no new product on the horizon, the Kuwaiti investment firm must have been working overtime to find a potential suitor.
It has now been reported that Mahindra & Mahindra, along with Investindustrial, are both interested in buying the majority stake in Aston Martin, which seems to have kicked off a bidding war. Investment Dar were reportedly seeking US$800-million, (the same price it paid for for the luxury car maker five years ago), but has since reconsidered its offer from a 64 percent stake in equity to 40 percent, coupled with 50 percent of the voting rights.
Mahindra & Mahindra is India’s largest SUV maker and acquired Korea’s SsangYong in 2011, while also having made a bid for Jaguar / Land Rover in 2008, which it lost out to with Tata Motors. An IHS automotive analyst, Deepesh Rathore, told the Financial Times why Mahindra has made the highest bid: “Mahindra wants to move into new markets, especially in America, and while there isn’t any obvious fit between the two businesses a brand like Aston Martin would raise their profile and they would be taken seriously.”
In contrast to Mahindra & Mahindra’s purely financial bid, although the amount is undisclosed, Investindustrial’s bid is said to total just US$400-million, but also bring with it a technical arrangement with Daimler AG, which could be vital to the future of Aston Martin. Investindustrial’s reported bid comes after selling the Ducati motorcycle brand to Audi for an estimated €860 million back in April, but it’s the marketing relationship that Investindustrial had established between Ducati and AMG that’s likely to hold value for Aston Martin.
While Mahindra & Mahindra would be looking to draw on Aston Martin’s technology, Investindustrial would be looking to inject fresh technology to the company via its ties to Daimler AG. It’s not rocket science to see which investment would be best for the Aston Martin brand, but it all depends on how urgently Investment Dar needs to extract its equity from the British marque. Of course, none of the parties involved have confirmed or denied any of the aforementioned dealings at this stage.
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