FRANKFURT (Reuters) - Germany's Daimler (>> Daimler AG) said it will receive up to a 5 percent stake in luxury sports carmaker Aston Martin in exchange for supplying engines and electronic components to the 100-year-old British firm.

Aston Martin will team up with the German car maker's high-performance Mercedes-AMG GmbH division to develop a new generation of bespoke V8 engines for its sports cars.

The deal will help Aston Martin, the only global luxury carmaker not attached to a larger manufacturer, spread the cost of developing new fuel-efficient vehicles.

Daimler will receive non-voting shares in Aston Martin, owned by Kuwaiti and private equity investors, in several steps as the technical partnership progresses, the companies said on Thursday. They began negotiating the deal in July.

The two car makers also plan to cooperate on the supply of electronic and electric components.

Daimler will get observer status on the Aston Martin Holdings board as part of the deal.

Existing Aston Martin shareholders include Italian private equity fund Investindustrial, Kuwait-based Adeem Investment and Prime Wagon.

Aston Martin has struggled to fund the development of a range of new vehicles while rivals like Bentley, which is owned by Volkswagen (>> Volkswagen AG), and Rolls Royce, which is owned by BMW (>> Bayerische Motoren Werke AG) have the ability to draw on the resources of their parent firms.

It reported a 9 percent fall in 2012 profit when it sold around 3,800 cars, around 10 percent fewer than the previous year.

(Reporting by Edward Taylor; Editing by Erica Billingham)

Stocks treated in this article : Bayerische Motoren Werke AG, Daimler AG, Volkswagen AG