GAYDON (Reuters) - Ford Motor Co. F.N is selling British luxury car maker Aston Martin to a group fronted by former Benetton and BAR motor racing boss David Richards in a deal worth 479 million pounds ($925 million).
The second-biggest U.S. carmaker said on Monday it would retain a 40 million pound investment in Aston Martin, the carmaker James Bond spy films made famous, and that it expected the deal to close in the second quarter of this year.
Details of the transaction broadly confirmed what sources close to the matter had told Reuters.
Richards, whose Prodrive motor-sport and engineering group has a team place for the 2008 Formula One championship, is being partnered in the deal by Kuwait's Investment Dar TIDK.KW and Adeem Investment Co, as well as John Sinders, a banker in finance and shipping from Houston, Texas, and Dubai.
Ford said in August it was considering the sale of Aston Martin to free funds to invest in its other brands amid a sharp downturn in sales.
The U.S. group posted the biggest loss in its 103-year history in 2006, falling $12.7 billion into the red, as high fuel prices and interest rates drove consumers away from the trucks and sport utility vehicles that had accounted for most of its sales and profits.
Ford is in the early stages of a four-year turnaround plan that includes closing 16 plants and cutting up to 45,000 jobs.
“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,” Ford President and Chief Executive Officer Alan Mulally said in a statement.
“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.”
Richards, founder and chairman of Prodrive, will join the Aston Martin board as non-executive chairman.
THE CAR’S THE STAR
Fully acquired by Ford in 1993, Aston Martin was founded at the start of World War One and battled against financial difficulties and the pressures of producing hand-crafted cars in an industry powered by mass production.
It was not until industrialist David Brown bought the company in the late 1940s that it enjoyed some stability. Brown’s initials are still used to name individual models.
The Aston Martin name was boosted by its star turn in the 1964 James Bond film “Goldfinger”, with Sean Connery swapping his Bentley for a gadget-laden DB5, complete with ejector seat, rockets and retractable armored shield.
Daniel Craig was behind the wheel of a silver DBS in the latest James Bond film “Casino Royale” in 2006.
The Transport and General Workers Union (T&G), which represents Aston Martin workers, said criteria for the sale should be to keep manufacturing in Britain and maximize jobs.
“The bid from Prodrive appears to best meet our criteria which is why we’re looking forward to meeting with them at the earliest opportunity,” said Dave Osborne, T&G national secretary for the car industry, said in a statement.
“This is a good business with a skilled workforce and a new leadership with a background in the industry.”
Ford said in January that Aston Martin was on a solid financial footing and had increased sales by around a half last year to about 6,500 units.
The U.S. group said its 40 million pounds investment in Aston Martin would be “an equity investment in a separate class of preferred shares.”
Ford shares in New York were trading flat on the day at $7.93 at 1711 GMT.
UBS advised Ford and Jefferies advised the buying group.
Additional reporting by Poonima Gupta in Detroit, James Cordahi in Dubai and Mark Potter in London
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