Daimler buys full control of Mercedes team

LONDON Mon Nov 19, 2012 7:56pm IST

Stocks

   

LONDON (Reuters) - German luxury carmaker Daimler (DAIGn.DE) has taken full control of the Mercedes Formula One motor racing team after buying a 40 percent stake owned by Abu Dhabi sovereign wealth fund Aabar Investments.

Involvement in Formula One gives a car brand like Mercedes access to a huge global TV audience following the 20-race series and allows it to use the drivers to help promote sales of road cars.

The sale of the Formula One stake is a logical step for Aabar which has been cutting its ties with Daimler. Aabar's disposal in October was triggered by a failed derivatives deal underpinning the investment firm's purchase of the shares, sources familiar with the matter told Reuters.

Last month it sold its remaining 3 percent stake in the company which produces Mercedes cars.

Regulatory approval is still required for the sale of the stake in the F1 team and financial terms were not disclosed.

Daimler and Aabar teamed up in motor racing in late 2009 when they bought out F1's then world champion, Brawn GP, and relaunched it the following season under the Mercedes name.

Mercedes is fifth in the 12-team Formula One standings, with just one race to go this season.

The team has signed a commercial agreement to compete in the sport until 2020. It hopes to perform better next season after hiring former world champion Lewis Hamilton on a three-year-deal worth a reported 45 million pounds.

Hamilton, who won the U.S. Grand Prix on Sunday, is one of the sport's most marketable figures who is seen as helping to add a dash of glamour to the Mercedes brand.

Parent company Daimler warned last month that it would miss its earnings forecast this year by about 1 billion euros, hit by the slump in the western European car market.

The Mercedes team had an annual budget of around 125 million pounds last year, which was covered by a mixture of sponsorship, commercial revenues and its own cash reserves, rather than requiring big additional spending from Daimler and Aabar.

Before rejoining F1 in 2010, Mercedes had last run their own Formula One team in 1955, when Argentine Juan Manuel Fangio drove for them and won the third of his five titles.

The carmaker pulled out of the sport that year after one of their cars crashed at the Le Mans 24 Hours sportscar race, killing more than 80 spectators in motor racing's biggest disaster.

Mercedes also supplies engines to the McLaren and Force India Formula One teams.

(Writing by Keith Weir; Editing by Dan Lalor and Louise Heavens)

Reuters Showcase

Markets Weekahead

Markets Weekahead

Column - Caution advised in a trader’s market  Full Article 

Reuters Poll

Reuters Poll

RBI seen holding rates steady on Tuesday, minority of analysts expect cut  Full Article 

GDP Revised

GDP Revised

Economic growth revised up by almost 50 percent  Full Article 

Australian Open

Australian Open

Hingis wins Australian Open mixed doubles title with Paes   Full Article 

Houston's Daughter

Houston's Daughter

Bobbi Kristina Brown revived after found unresponsive in tub  Full Article 

India Art Fair

India Art Fair

Art fair turns India's capital into art hub.  Full Article 

Movie Review

Movie Review

"Rahasya" is an ode to Agatha Christie.  Full Article 

Review: Hawaizaada

Review: Hawaizaada

Movie Review: Hawaizaada  Full Article | Related Story 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage