F1 team owner buys stakes in Aston Martin

British firm receives much-needed cash injection on eve of DBX launch

Billionaire businessman Lawrence Stroll has bought a £182million stake in Aston Martin, equating to just under 17 percent of the company, and takes on the role of executive chairman, replacing Penny Hughes. Andy Palmer will remain the company’s CEO. Stroll will provide £55.5million of immediate funding to ease the pressure on the British firm as it readies production of the DBX.

Stroll’s investment is much needed by Aston Martin following a financial battering since the company went public in October 2018. Its opening share price of £19 valued the company at over £4billion, but in the 18 months since, this has dropped rapidly, the share price sitting at around £4 at the time of Stroll’s investment, valuing the company at under £1billion. Although Ferrari experienced a similar financial rollercoaster ride when it went public, the financial press and analysts are seemingly only interested in talking Aston Martin down as it has experienced a period of growth never known from the firm. Stroll’s investment should hold them back.

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The news comes after months of speculation that included Geely, the Chinese owner of Volvo and Lotus, as a potential investor or buyer for the Gaydon-based firm.

> Aston Martin DBX prototype review - the best SUV yet?

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Following Stroll’s investment, Aston Martin will raise a further £500million of investment via a new share issue in April. This will see the billionaire’s stake in Aston Martin increase to 20 percent. 

Stoll’s financial boost comes on the eve of the launch of the firm’s most important model for a generation, the DBX. With 1400 orders required to secure a release of funds, the SUV went on to secure 1800 orders, with Aston Martin seeing a constant flow of deposits since. It is expected to sell out 2020’s production run when the car reaches showrooms this summer.

While Aston Martin’s Second Century Plan will continue, Stroll and Palmer have made some adjustments to the new product timings. The Valkyrie hypercar remains untouched, with the first customer cars expected to be revealed at the end of 2020. However, the new range of mid-engined supercars, which include the Valhalla and new Vanquish, now won’t appear until 2022 (a 12-18 month delay). Aston Martin is developing its own six-cylinder hybrid powertrains for these mid-engined models, and it’s rumoured that a major OEM is also interested in a supply contract for these, which will further boost Aston’s standing should it come to fruition. 

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It is Aston Martin's electrification programme that takes the biggest hit following this new investment. With the Rapide E already cancelled, the all-electric Lagonda brand will now appear at least three years later than previously planned, with Aston confirming the first car won’t arrive until after 2025. 

Away from the road cars, Lawrence Stroll will also reshape Aston Martin’s involvement in Formula 1. With the company’s sponsorship deal with Red Bull coming to an end when the 2020 season finishes, Stroll and Palmer have agreed to renaming Stroll’s Racing Point F1 team as the official Aston Martin Formula 1 team. Stroll bought Racing Point in 2018 when Force India went into meltdown. 

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Despite this new investment, Aston Martin will still be expected to save costs, with £10million of savings earmarked per year, which is expected to have an impact on recruitment and existing roles within the business.

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