Daimler Might Buy Aston Martin Sooner or LaterGiancarlo Perlas August 7, 2014
Daimler recently increased its stake with Aston Martin from 4 percent to 5 percent. The numbers may look like a very small figure for the parent company of Mercedes-Benz, but the extra cash would enable the British supercar brand to have more funds for its operations.
The recent move of Daimler to buy more shares in Aston Martin fueled further speculations that it might be looking to buy the British carmaker sooner or later.
In the previous interview of Dr. Dieter Zetsche regarding the matter, he denied having such plans. He said that their partnership only involve “arm’s length transaction”. In the words of the Daimler CEO, such decision “could deduct too much management attention”.
In addition, experts stated that the German multinational corporation is likely to be treading lightly when it comes to the acquisition of big brands after losing so much when it got Chrysler under its wing. Next, there’s the issue too wherein other shareholders of the British brand might not be so welcoming with the idea of a takeover by Daimler.
However, Jalopnik presented some good reasons why a takeover may be imminent:
- The relationship of Daimler and Aston Martin is growing closer, with the latter’s dependency on the former increasing lately. First, there was only the engine deal, but now the Germans will be supplying electrical systems to the automaker as well.
- Currently, Aston Martin is mostly held by private investors. There may come a time soon when these investors would cash in their shares. Thus, the brand needs a major backing from a company with big name to keep their existence. Another scenario would be other shareholders might sell their stake later to Mercedes’ parent.
- Aston Martin needs to upgrade its products regularly to keep up with competition, demand, and government regulations. The money needed to run its research and development division alone requires millions of cash. Once again, the supercar company needs something as big as Daimler to ensure the cash flow for its operations.
On the second thought, the source questioned about what could Aston Martin possibly offer to Daimler that Mercedes-Benz doesn’t already have. Then again, Daimler is known to put up surprises not only with its products and services but also with its decisions. So, everything remains to be seen.
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