It is reported by reliable sources in Germany and Switzerland that the Mercedes-Benz move on the Brawn GP team is part of a much bigger strategy which will see the team become a subsidiary of the German car manufacturer by 2012. In the interim, 75% of the Brawn shares will be acquired by Aabar Investments, a public joint stock company which is listed on the Abu Dhabi Securities Exchange.
Founded in 2005 with a mandate to develop the country’s oil and gas businesses, Aabar came under the control of the International Petroleum Investment Company (IPIC), an oil-driven investment fund owned by the Abu Dhabi government, in March. That happened the day after Aabar paid out $2.7bn for a 9.1% shareholding in Daimler AG, the parent company of Mercedes-Benz. The suggestion is that Aabar will hold the Brawn stake until it can be passed on to Mercedes-Benz in 2012 after the German car manufacturer’s exclusive deal with McLaren comes to an end.
Mercedes-Benz still owns a 40% share of McLaren, but this has proved to be not enough to control the business as there is a covenant between the other shareholders which means that Mercedes-Benz can be overruled. The suggestion is that Brawn will race next year in a silver livery, with Mercedes branding and a sponsorship deal from a German company. The latest rumours suggest that Mercedes-Benz wants to put Nico Rosberg into the team alongside Jenson Button to give German fans someone to get excited about.
Ironically, Aabar recently bought a 32% share in Virgin Galactic, one of Brawn’s sponsors this year. Virgin is not believed to be involved as it is expected to be named as a partner in Manor Grand Prix, which we expect to see renamed Virgin F1 in the months ahead.
The McLaren-Mercedes relationship has been very successful over the years. The original deal was done in the autumn of 1994 and the partnership was launched in 1995 with drivers Mika Hakkinen and Mark Blundell (Nigel Mansell having stood down because the chassis was too small for him). The partnership did not win a race until the start of 1997. The following year Mika Hakkinen won the World Championship and he followed up with a second title in 1999. The team would not win another title until Lewis Hamilton became World Champion in 2008. Despite this the partnership has resulted in 59 victories, 20 of them for Mika Hakkinen, 12 for David Coulthard, 10 for Lewis Hamilton and nine for Kimi Raikkonen. Others to have won in McLaren-Mercedes cars are Fernando Alonso (4), Juan-Pablo Montoya (3) and Heikki Kovalainen (1).
Mercedes bought into McLaren in 1999 when plans for the Mercedes-Benz McLaren SLR road car were announced. By 2005, however, Mercedes was clearly looking at a different strategy, acquiring AMG to become its in-house developer of high performance vehicles. McLaren pushed ahead with the development of its own MP4-12C, which was announced today. This is no obvious Mercedes-Benz involvement in that project.
There was talk in 2007 that Mercedes might be considering its own B Team in Formula 1 and HWA, the AMG offshoot that runs the Mercedes-Benz DTM programme and supplies the company with its Formula 3 engines, was mentioned as a possible partner.
joeblogsf1 
Strategically it makes sense for Daimler Benz, the Brawn Team is very successful and Ross Brawn is held in very high esteem in Germany, if only of all those F1 titles of MS. By the way, is there a reason why his name was spelled Braun in some of the pdfs published by the Fia regarding the diffuser row? And what about Renault, then is it all true, apparently Pat said it was Piquets idea, I couldn’t believe my ears, ah well, eyes…
Well it is Daimler AG these days, without any Benz oder Chrysler, Mercedes Benz beeing a subsiduary
Good piece of research and writing, Joe – I’ve not seen this information brought together in one picture anywhere else, and it’s why I keep you at the top of my F1 bookmarks!
what a kick in the 8o!!0x for McMoRons!!!! Ever since Ron Dennis disastrous mis-management of Alonso and Shamilton, (giving equal status to a double world champion and a rookie!!), Mercedes went off the boil as far as McLaren were concerned. They must have seen then Dennis was an idiot for the way he handled Fernando…Hamilton is fast but speed doesnt always make a champion! McLaren could have had it all in 07-08, but they ended up with nothing and minus 100 million big ones!!!! Getting caught with “Ferrari Intellectual Property” was the final straw. Maybe Alonso will be going to Brawn/Mercedes and not Ferrari after all, which wouldnt surprise me now!!! 😉
I don’t think that competition in the top-end of the marketplace between BMW and M-B is necessarily a problem. There;s no doubt that if McLaren sell enough MP-4 C12s @£160k each, they possibly don’t need funding from Mercedes. However the McLaren Mercedes brand is well esbtalished, and the two sides are both gaining a great deal from the situation as it is now. The engine is certainly the class of the field at the moment.
If Mercedes want a larger say in an F1 team, buying into Brawn, who have great marketability and a great technical base, is the way to go.
I see it working out fine – McLaren Mercedes progressing as they are, with the excellent F1 engine from Mercedes, and the (usually) fine chassis from McLaren. The racing is managed mainly by Team McLaren, with Norbert (or similar) sitting there to oversee the engine side of that.
Brawn Mercedes will be a team, I’m guessing, with much more direct Mercedes input into the running of it at a high level (drivers and other personnel), but again with the chassis of course from Brawn and the engine from Mercedes. And when the Brawn team do well, with the lower budget, Mercedes walks away with lovely actual prize money as a result. 🙂 If I was M-B I would not want to have sole ownership of the team. It leads to too much crossover between the corporate and sporting arms.
Buying into Brawn sounds extremely sensible to me. Don’t they say that the people who make money in recessions are those who buy the assets that others (in this case Honda) sell at knock-down prices? And since in this case Brawn bought the team for $1, whatever Mercedes pay for the team is pure profit.
I see McLaren Mercedes and Brawn Mercedes competing against each other successfully just like Williams Renault and Benetton Renault did in the 90s, and McLaren Honda and Lotus Honda did in the late 80s.
Winners all around… and here’s a thought. The strong situation that Brawn has found itself in is all credit to Honda, and the way that they managed the process of leaving F1. They handed the team over to the management and gave them a starting budget. They behaved extremely honourably, and they probably forked out less than they would have in redundancy packages.
Now look at what BMW did. They failed to sign the Concord agreement, and as you and others have pointed out, wiped about $80 off the value of their asset, and made it much harder to sell as a going concern. Even if they now sell it to Peter Sauber for €1 (and the word is they are looking for €65m) he has all the hassle of trying to get an entry again for next year.
So BMW have shown us how NOT to leave F1. They’ll probably end up paying more in redundancies than they would have lost by selling to PS for whatever he was offering the night before the Concorde cut-off date. The BMW operation has been more successful in the last few yeasr than Honda-as-was, but I’m starting to wonder if anyone is going to pick up the pieces of BMW.
No wonder BMW are not very popular.
Re: This is no obvious Mercedes-Benz involvement in that project.
Not sure where I read it but there is talk of the engine being based on a 6.2 V8 from AMG.
I was at a party last Christmas and had a chat with a bloke who said he was in charge of development of the 12C. I tried to draw him on where the engine was comming from but he wouldn’t say. Another friend told me it was based on and unused Indycar design but I cant see that working in this day and age.
Something about the whole Mosley/Dennis thing seems to have left a very bad taste in the mouth at Mercedes. Perhaps a squandered championship?
Also, an all German (or German-Swiss) venture would make a lot of sense, from a Deutscher point of view.