On January 31, 2020, Aston Martin Lagonda’s Board of Directors accepts Lawrence Stroll’s proposal. Is this a good thing for the British manufacturer?
The takeover of a company by a consortium, Lawrence Stroll is used to it. After taking over the F1 Force India team, which became Racing Point. With a consortium including Lawrence Stroll himself; Silas Chou, the man from Hong Kong, has invested in the Michael Kors brand; André Desmarais, President of Power Corporation and specializing in portfolio management; Jonathan Dudman, at the head of Monaco Sports and Management and specializing in management consulting; John Idol, chairman of Michael Kors Holding; John McCaw Jr, specialized in telecommunications, and finally Michael de Picciotto, head of the London branch of Union Bancaire Privée. It is now Aston Martin Lagonda’s turn to have recovered.
The consortium, giving away £ 182million, took over 16.7% of the shares of Aston Martin Lagonda. In this consortium, we find many people who led the takeover of Force India, such as Silas Chou, André Desmarais, Michael de Picciotto, John Idol and John McCaw Jr. We find a new investor, namely Lord Anthony Bamford, who is the president of JCB. The consortium will seek, in the future, to take 20% of the shares, for a total investment of 500 million pounds.
Aston Martin’s complicated situation
Created in 1913 by Lionel Martin and Robert Bamford, the company has known several owners. We count David Brown, whose story will be told later; a consortium of investment banks, chaired by William Wilson; Peter Sprague, North American businessman, and Alan Curtis, British real estate developer; Victor Gauntlett, at the head of Pace Petroleum (Kuwait oil company); the manufacturer Ford and a consortium led by David Richards, at the head of Prodrive and aided by the American investment banker John Singers and two companies from Kuwait, namely Investment Dar and Adeem Investment.
When Ford sells the British automaker to the consortium led by David Richards for £ 475million, with the American automaker keeping a stake valued at £ 40million, Aston Martin Lagonda turns a profit. They amount to 44 million pounds for 529.5 million in turnover.
The latest owner of Aston Martin is Italian private equity fund Investindustrial, which took 37.5% of the shares in late 2012 for £ 150million. At that point, turnover was only £ 428.6million for a loss of £ 20.9million.
At the end of 2018, the British brand had a turnover of 949.5 million pounds sterling for a profit of 44.7 million. However, the holding company, which has 1.1 billion pounds in turnover, lost 57.1 million. In the first half, the company lost 78.8 million pounds sterling for 407.1 million in turnover.
Aston Martin returns to F1
With this agreement, we learn that Aston Martin will return to F1 in 2021, taking the place of Racing Point, and for a period of ten years, with a commercial agreement between the manufacturer and the team for a period of five years. (between 2021 and 2025), with an option for the following five years.
Of course, it is difficult to know the agreements made between the manufacturer and the F1 team. The logic would be a rebranding, as Alfa Romeo does with Sauber, which holds the entry rights to race in F1, so as not to lose the famous Prize Money.
The British manufacturer took part in five F1 races, between 1959 and 1960, with the David Brown Corporation team. The British industrialist bought the brand in 1947 for 20,500 pounds sterling. He was also behind the takeover of the Lagonda brand the following year for £ 52,500.
Lawrence Stroll, the right person?
With an estimated fortune of $ 2.7 billion, Lawrence Stroll owes his success to his investments in various brands, such as Tommy Hilfiger and Michael Kors. His expertise and connections are good for Aston Martin.
“Lawrence Stroll and his consortium are a group of very big names and that is a great sign of confidence in Aston Martin and our plan that they have invested in. They have enormous experience in luxury brands,” says Andy Palmer. , current CEO of the brand.
The Canadian businessman has above all great relations with other manufacturers and in particular Mercedes, via Toto Wolff. The two men seem inseparable in the F1 paddocks. Especially since Daimler, parent company of Mercedes, owns 4.18% of Aston Martin.
Recently, Lawrence Stroll and Toto Wolff were linked with a possible takeover of the Mercedes F1 team, which was planning to leave after the 2020 season. The German manufacturer has since denied, although a member of the management of the brand Wihuri, former sponsor of Valtteri Bottas, said the idea of leaving F1 had been discussed for more than two years.