Chinese carmaker Geely takes 8% stake in Aston Martin

Geely has taken a stake of almost 8 per cent in Aston Martin, building a holding in the luxury carmaker long sought by the Chinese auto group.

The company, which owns carmakers including Lotus and Volvo, bought into Aston during the recent £654mn rights issue, and will now try to collaborate with the UK group on some technologies.

The stakebuilding comes after several rebuffed attempts by Geely to buy into Aston in recent years, most recently over the summer.

The Chinese group has long been seen in the market as a potential acquirer of the company, should chair Lawrence Stroll wish to sell.

On Friday, Stroll issued a statement concluding the fundraising, and welcoming Saudi Arabia’s Public Investment Fund, which he described as “one of the leading global investment funds”, into the business as an “anchor shareholder”.

At the end of his statement, Stroll said he also “would like to welcome Geely Holding, who have today announced that they have become a shareholder”. The company does not get a board seat.

Geely Holding chief executive Daniel Li said the business “believes that with our well-established record and technology offerings, Geely Holding can contribute to Aston Martin’s future success”.

He added: “We look forward to exploring potential opportunities to engage and collaborate with Aston Martin as it continues to execute its strategy to achieve long-term, sustainable growth and increased profitability.”

For Geely, the deal has echoes of its investment in Mercedes-Benz, an unsolicited stakebuilding that saw it take almost 10 per cent of the German carmaker.

Despite not having a board position, Geely has done several deals with the group, including taking control of the Smart brand through a joint venture, and giving Mercedes exclusive rights to supply premium cars to Geely’s own ride-hailing fleet.

Although talks have not started, there are several potential areas where Aston and Geely could collaborate, including the use of Lotus technology and development of lightweight materials.

Aston will also this year decide on its partner for its first electric car in 2025, with the company in talks with Mercedes, which has a large stake in the UK group and a long-running technology partnership, as well as Lucid, the start-up backed by PIF, and Britishvolt, another start-up.

There are several high-performance electric technologies within Geely’s stable, including its Polestar brand and those being developed by Lotus for its range of battery cars.

Geely’s stake in Aston marks the culmination of years of interest in the brand by Li Shufu, the Chinese billionaire business magnate and founder and chair of Geely Holding.

The Chinese group made several approaches for the company even before its initial public offering in 2018.

When Aston needed a bailout in late 2019, the Chinese group and Stroll pitched two rival offers.

Geely’s vision was to globalise the business’s production plans and push quickly into electric cars, in an echo of its Lotus investment.

But Stroll wanted to re-enter Formula One and focus on mid-engine supercars to rival Ferrari, in an effort to restore Aston’s luxury credentials.

The board ultimately backed Stroll’s vision, though Geely had not lost interest.

In July, Geely teamed up with Italian buyout group Investindustrial to launch a £1.3bn investment proposal that Aston rejected as “an attempt . . . to acquire a controlling and prospectively majority ownership position without any premium paid to existing shareholders”. 

Investindustrial was previously a significant Aston shareholder, a driver behind the IPO and a supporter of Geely’s 2019 attempt to buy into the group.