McLaren F1 team to be valued at over £3B
What's the story
The McLaren Formula One team is set to be valued at over £3 billion in a major deal. The transaction will see Mumtalakat, Bahrain's sovereign wealth fund, and Abu Dhabi-based automotive investment group CYVN Holdings acquire the remaining 30% stake in McLaren Racing. The move would give these Gulf investors full control of McLaren Racing, according to Sky News.
Valuation details
McLaren's impressive performance under CEO Zak Brown
The deal, which could be announced as early as Tuesday, would value McLaren Racing at over £3 billion. This figure highlights the impressive performance of its motorsport operations under CEO Zak Brown. Last weekend, McLaren driver Oscar Piastri won the Dutch Grand Prix at Zandvoort. Meanwhile, his teammate Lando Norris is currently second in the drivers' rankings.
Stake acquisition
Buying out minority shareholders
The deal will see Mumtalakat and CYVN buy out the stakes in McLaren Racing held by MSP Sports Capital, Ares Management, UBS O'Connor, and other minority shareholders. MSP Sports Capital led a 2020 deal to buy an initial 15% stake in McLaren Racing at a post-money valuation of £560 million. This transaction provided much-needed capital to the wider McLaren Group during the pandemic-induced financial crisis.
Financial recovery
Mumtalakat will remain controlling shareholder
The expected £3 billion-plus valuation for the 30% stake reflects the stronger financial position of the wider McLaren Group and the stellar performance of its racing business. Some minority investors in McLaren Racing bought their stakes in 2021 and will also benefit from this sale to McLaren Group. After buying out these minority investors, Mumtalakat will remain the controlling shareholder of McLaren Racing, insiders told Sky News.
Future prospects
IPO is still years away for McLaren
Despite years of speculation about a potential public listing, McLaren's repeated reliance on private shareholders for funding and supply chain challenges mean an IPO is still years away. The company underwent a major restructuring during the COVID-19 pandemic, resulting in hundreds of job losses. Founded in 1963 by Bruce McLaren, the group has been a dominant force in motorsport for decades, with over 200 Grand Prix wins to its name.