Mercedes-Benz will increase its stake in Aston Martin to up to 20 percent from 2.6 percent as part of an expanded technology partnership between the automakers.
Aston Martin will get access to advanced Mercedes technologies, including next-generation hybrid and electric powertrains, Mercedes said in a statement on Tuesday.
Mercedes will receive new shares in Aston Martin as part of the partnership. Mercedes said it will not increase its holding in Aston Martin above 20 percent.
Mercedes will become Aston Martin's biggest shareholder after Canadian billionaire Lawrence Stroll, who bailed out the automaker early this year.
Stroll said Aston Martin will get Mercedes's latest and newest technology, which the struggling automaker did not have access to previously.
Tobias Moers, the former head of Daimler's Mercedes-AMG performance division, replaced Andy Palmer as Aston Martin's CEO on Aug. 1.
Moers said Aston Martin's initial partnership with Mercedes, formed in 2013, "was just to open the door."
"Now we have access to the whole powertrain lineup of AMG, for example, from the low end to the high end," he said. "We can use their technology to transform it a little bit more bespoke for our cars in the future."
By expanding its tie-up with Mercedes, Aston Martin will spare its already stretched balance sheet from spending on a costly shift away from internal combustion engines.
Mercedes will not put any cash into its partner. Supplying electric-car technology to Aston Martin will boost economies of scale beyond Mercedes’s own product range.
Stroll, 61, said that Zelon Holdings and Permian Investment Partners will become new shareholders in Aston Martin as part of a new financing plan.
"The opportunity draws numerous parallels to our early 2016 investment in Ferrari," Permian said in an emailed statement. "We believe that Aston's improved balance sheet and expanded strategic partnership will propel best-in-class execution from this new and highly reputable team and ultimately lead this renowned luxury brand to maximize shareholder value over the coming years."