Daimler takes full control of Mercedes team
German luxury carmaker Daimler 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 ($71.3 million).
Hamilton, who won the US 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 ($1.27 billion), 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.