Car lovers know it as an icon of British motor engineering. Movie fans have drooled as the world’s most famous secret agent, James Bond, drove one breathtaking model after another on his numerous adventures-in 11 movies, to be precise, including the latest, ‘Skyfall’. And now, Aston Martin, the maker of iconic luxury cars, could soon have an Indian owner. Mahindra and Mahindra is involved in a thrilling battle for the British car maker, reported by the financial press over the weekend.
The winning bidder will get 50% of the voting rights and a 40% equity stake, a source familiar with the matter said. Italian private equity fund Investindustrial recently reached an agreement with the owner, Kuwaiti investment house Investment Dar but Mahindra and Mahindra has made a higher offer, leaving the fate of the 98-year old firm in the balance, sources familiar with the discussions said. Investment Dar, the other Kuwaiti investors and Aston Martin management will retain the rest, the source said.
“Talks are continuing through the weekend,” said one source, who revealed that Investindustrial had bid between 200 million and 250 million pounds ($400 million) for the stake, and was confident of winning the race because it sees its proposal as “technically” superior, including a technical partnership deal with Daimler AG’s Mercedes. The exact figure quoted by M&M was not available.
The same source said manufacturing would stay at Gaydon, Warwickshire, under the Italian proposal. The company was sold in 2007 by US-based Ford Motor for 479 million pounds ($767 million), to Kuwait’s Investment Dar and another Kuwait fund, Adeem Investment Co. The consortium was fronted by David Richards — former Formula 1 Benetton and BAR racing boss, who remains chairman. Aston Martin sells about 15% of its DB9, Vanquish and other models in Asia. Wealthy Chinese buyers snapped up 110 cars in 2010 and sales are expected to have multliplied five-fold to over 500 this year.
A spokesman for Investment Dar, which went to the market for a $1-billion debt restructuring last year, was not immediately available for comment. M&M could not be reached for comment. Investindustrial declined comment. Investindustrial, owned by Italy’s Bonomi family, is not new to luxury motor brands. In 2006, it bought Italian motorcycle maker Ducati and sold it for about 860 million euros last April to Volkswagen’s Audi division. Mahindra is the world’s number one tractor maker. It also makes more sport utility vehicles than any other Indian motor manufacturer, and controls South Korean car maker Ssangyong Motor Co Ltd.
A second source familiar with the process said Mahindra was keen to access the Aston Martin technology to upgrade its existing vehicle platform. Another Indian motor company, Tata Motor, owns British luxury manufacturer Jaguar Land Rover, and has had even more success than Aston Martin in China, now Jaguar Land Rover’s biggest market.