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Making good on a letter of intent signed earlier this year, Aston Martin and Mercedes have agreed to a new technical partnership that will see the two brand’s co-develop a new line of V8 engines.

In a release Aston Martin announced the new bespoke V8 engines will be used to power its next generation of models, which will combine not only high performance but also fuel economy.

As a part of the deal, Daimler AG, the parent company of Mercedes-Benz, will take a five percent stake of non-voting shares in Aston Martin and will also receive observer status on the Aston Martin Holdings board. Daimler will join several other stakeholders in the British automaker, including Prime Wagon, Adeem Investment and Investindustrial.

In addition to these terms, Mercedes will supply Aston Martin with electric/electronic components and both companies will look to grow the partnership, exploring opportunities to cooperate in the future.

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“Our company is this year celebrating its centenary, and the partnership agreed today underpins prospects for Aston Martin’s bright, vibrant and dynamic second century in the sports car business,” said an Aston Martin board member. “This strategic collaboration for Aston Martin will, in our next generation of luxury sports cars, offer our customers increased performance and efficiency whilst retaining the unique character and style of an Aston Martin.”