Report: Aston Martin and Mercedes working on $385 million co-op agreement

News of a new cooperation agreement between Aston Martin and Mercedes-Benz, called appropriately enough, 'Romeo and Juliet', has come to light. Though it's not finalized yet, the deal is not a total surprise, though its scope is bigger than anticipated, with a value estimated at $385 million and covering everything engines, hybrids, new Lagonda models and even a possible 4x4.

Aston’s current engine deal with Ford, which sees the V8 and V12 engines for the Vantage and DB9/DBS models built at the Blue Oval's Cologne plant, is expected to dry up in 2012, after which a new partner will need to be found.

Dave Richards, the boss of one of Aston Martin’s biggest investors, Prodrive, confirmed back in May that the British luxury marque was in talks with several other companies over a range of possible tie-ups but mostly over a new engine deal.

The initial phase of the agreement had been named Project Alligator, but the new 'Romeo and Juliet' code-name, chosen - hopefully - for its connotations of Anglo-German romance, and not futile suicide, portends a future that could see extensive and long-lasting cooperation between the two carmakers. Earlier this week BMW revealed that it was in the midst of a joint-purchasing arrangement with Mercedes as well.

One of the possibilities could see the hand-built AMG 6.2L V8 engine appear in the Vantage (pictured). There’s also talk of diesel and hybrid Aston Martins being developed in the future as well as a new flagship model to be shared with the Maybach brand. A range of proposed Lagonda models is thought to be on the table, including a SUV or other 4x4. Even a DB10 is possible, reports CAR. Other possibilities include platform sharing for top-end models and the development of a new eight-speed automatic transmission. All of these offer potential to help Aston in its bid to take the brand even further upmarket in addition to the One-77 special-edition.

Richards had earlier quelled speculation that the British carmaker could be up for sale following reports claiming Kuwaiti-based investment firm Investment Dar would sell its 50% stake in the company. Speaking at the Nürburgring 24-hour this year, Richards said the speculation arose from previous rumors that suggested Aston Martin was in talks with Mercedes-Benz over an engine-sharing deal.

In March, it was reported that Aston Martin was considering borrowing smaller V6 and V8 engines from Mercedes-Benz and possibly hybrid powertrains as well to help meet new emissions regulations and environmental concerns. At the time, Richards confirmed there were talks with Mercedes-Benz but explained that it was just one option being investigated.