Ford sells £479m Aston Martin

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Manufacturing News, Source : TheManufacturer.com
Published : 12 Mar 2007 10:47
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Aston Martin is to return to British ownership after 20 years in the hands of US automotive giant Ford Motor.

Ford, which alongside rival General Motors has been struggling against Japanese rivals and cumbersome corporate and manufacturing structures and strategies, announced today that it would sell the luxury sports car brand to a consortium of investors including Formula One guru David Richards at a price which valued the company at £479 million.

As well as Richards, the consortium comprises John Sinders, an avid Aston Martin collector and a backer of Aston Martin Racing; and Investment Dar and Adeem Investment Co, international investment companies headquartered in Kuwait.

The Detroit-based group made losses of more than £6 billion last year and has announced plans to lay-off thousands of workers and shut down manufacturing plants.

The valuation is reported to be around half of Ford’s original hopes when it invited formal bids last year and decreed a January 31 deadline, but in today’s deal it said it was itself hanging on to a £40 million investment.

Richards, who is backed by a number of investors, is already close to Aston as his Prodrive company works with Aston Martin Racing, providing some of its design, construction and racing services to the Le Mans-winning outfit.

Part of Ford’s Premier Automotive Group comprising Jaguar, Land Rover and Volvo, Aston Martin is pretty much a self-contained operation with factories at Gaydon and Newport Pagnell and therefore considered a relatively undisruptive ‘sell’. It is, however a very small part of Ford, representing just one per cent of the giant’s operations.

In a formal announcement at 1pm GMT, Ford said it had “entered into a definitive agreement to sell Aston Martin, its prestigious sports car business, to a consortium comprised of David Richards, John Sinders, Investment Dar and Adeem Investment Co.”

The sale is expected to be completed next month. “Other terms and conditions specific to the sale are not being disclosed at this time,” Ford said.

Ford CEO Alan Mulally said the sale of Aston Martin supported 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. "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 Company, good for Aston Martin and good for the UK. We wish Aston Martin every possible success for the future."

Justin Mirro, managing director and head of Jefferies' automotive investment banking group, which advised on the acquisition said the new ownership of Aston Martin was committed to growing the business globally while protecting the integrity of the brand. "No one is better equipped to lead this growth than David Richards, a passionate supporter of motorsport racing and a successful developer of global brands for many of the automotive OEMs," he said.