Mercedes-Benz and Aston Martin have announced a new strategic technology agreement and an enhanced partnership, which will see the German automaker supply its hybrid and electric powertrains as well as vehicle components and systems to Aston Martin, in exchange for an increased stake in the British automaker.

The expansion of the existing cooperation will see new shares being issued to Mercedes-Benz in stages over the next three years, up to a total value of 286 million pounds sterling (around RM1.55 billion). This will increase the German company’s stake in Aston Martin to 20% by 2023 from the current shareholding that stands at 2.6%.

Both companies first entered into a strategic cooperation in 2013, with Mercedes-Benz supplying AMG V8 engines and other components to Aston Martin, which has been used in models like the DB11, Vantage and DBX. This deal saw the German company receive an equity participation of 5%, which later became 2.6% following Aston Martin’s initial public offering (IPO) in 2018 and various further financing rounds.

According to an official release, Mercedes-Benz has no plans to go beyond an equity participation of 20%, with the new shares set to be issued in several tranches by 2023. The first tranche is valued at 140 million pounds sterling (around RM760 million) and will bring the German company’s shareholding to 11.%.

Further tranches will require discussions between the parties, as they will need to agree upon the scope of the technology to be made available to Aston Martin, the respective value (“entry fees”) and the piece prices of components and systems.

“We already have a successful technology partnership in place with Aston Martin that has benefited both companies. With this new expanded partnership, we will be able to provide Aston Martin with access to new cutting-edge technologies and components, including next generation hybrid and electric drive systems,” said Wolf-Dieter Kurz, head of product strategy at Mercedes-Benz Cars.

“The supply arrangements for these new technologies will be on agreed commercial terms. We look forward to continuing to work together with Aston Martin and we wish the company every success in its next stage of growth,” he added.