Ford to sell majority of Aston Martin

Automaker to keep 9.4% stake, says $848 million sale will help fund its turnaround plan

March 13, 2007|By Detroit Free Press

DETROIT -- Ford Motor Co. has agreed to sell a controlling stake in its Aston Martin luxury brand to a group of investors, raising $848 million to help fund its turnaround plan.

The Dearborn, Mich., automaker said it will retain a 9.4 percent stake, valued at $77 million, in the profitable British-made brand. That values all of Aston Martin at $925 million.

The long-rumored deal calls for British driving champion David Richards, Kuwait-based Investment Dar Co. and Adeem Investment KSC, and U.S. banker John Sinders to become majority owners of Aston Martin.

The transaction is expected to close by the end of April and is subject to customary closing conditions, including applicable regulatory approvals.

Founded in 1914 by Lionel Martin and Robert Bamford, Aston Martin turned out its first car in 1915. Ford bought a controlling stake in 1987 and acquired full ownership in 1994. It said last August that it would be interested in a full or partial sale.

Aston Martin, made famous by the early James Bond films, has been a part of Ford's Premier Automotive Group that includes Volvo, Jaguar, Land Rover and Lincoln.

"It's exciting and terrific news for Aston Martin," said Tom Dupont, publisher of the Dupont Registry, a high-end auto enthusiast magazine in St. Petersburg, Fla. "The folks from England that are on the mechanical front end of this deal are technologically on the cutting edge and will help the company tremendously."

With price tags starting at $110,000, the DB9 and V8 Vantage models are made at Aston Martin's headquarters in Gaydon, and later this year, a DBS model will go into production at the Warwickshire plant, where 1,600 people are employed.

Ford, which lost a record $12.7 billion last year, is in the midst of a major restructuring effort that will result in closing several assembly plants and idling shifts across North America. In addition, the company will cut about 37,000 union jobs and 14,000 salaried positions.

"The sale of Aston Martin supports the key objectives of the company, to restructure to operate profitably at lower volumes and changed model mix and to speed the development of new products," said Alan Mulally, Ford's president and chief executive officer.

"From Aston Martin's point of view, the sale will provide access to additional capital, which will allow Aston Martin to continue the growth it has experienced under Ford's stewardship," he said.

"Today's announcement is good for Ford Motor Co., good for Aston Martin and good for the UK," Mulally said. "We wish Aston Martin every possible success for the future."

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