Aston Martin (AML) Shares Surged 23.7% on a £234M Investment

The Aston Martin Lagonda Global Holdings PLC (LON: AML) share price surged 23.7% after receiving a substantial investment from Geely Holding, China’s leading independent automotive group, to form a new business relationship that supports Aston Martin’s growth.

Geely has committed to investing about £234 million to become the third largest shareholder in Aston Martin. The investment will be completed by Geely acquiring 42 million existing shares from the Yew Tree Consortium at 335 pence per share for a total of £140.7 million.

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The remaining amount shall be invested via a subscription for 28 million New Shares at 335 pence per share, worth £93.8 million. The Yew Tree Consortium will remain the largest shareholder, with about 21% of Aston Martin’s outstanding shares. 

Geely will own about 17% of Aston Martin following the transaction, making it the third largest shareholder after Saudi Arabia’s Public Investment Fund, which owns 18% of the company at number two, and the Yew Tree Consortium is the largest shareholder.  

Lawrence Stroll, Aston Martin’s Executive Chairman of the Board, said: “ This announcement is a further significant step towards delivering our ambition for Aston Martin.  Geely Holding, who initially became a shareholder last year, sees tremendous potential for Aston Martin’s long-term growth and success. They offer us a deep understanding of the key strategic growth market that China represents, as well as the opportunity to access their range of technologies and components. Geely share our vision for Aston Martin and want to be a more significant shareholder.”

Aston Martin believes that the transaction enables the creation of a long-term partnership with Geely, which could bring significant value to the company’s shareholders over time.

The two companies have signed a Relationship Agreement similar to that signed between the company and its other large shareholders, which allows Geely to appoint a Non-Executive Director to the company’s board. 

Geely will also share its technical know-how and experience in the Chinese market, representing a significant growth opportunity for Aston Martin’s ultra-luxury cars, given that China is the world’s largest single-car market. 

*This is not investment advice. 

Aston Martin (AML) share price.

The Aston Martin share price surged 23.69% to trade at 285.23p, from Wednesday’s closing price of 230.60p.