(Bloomberg) – Audi is considering deals with British sports car maker McLaren Group as the German maker seeks ways to get into Formula 1 and promote its electric car technology, according to those familiar with the matter.
Most read by Bloomberg
The maker plans to research McLaren’s financial data in the coming weeks to help decide on potential transactions, according to people familiar with the matter. Volkswagen AG’s premium brand had previously circulated the idea of acquiring McLaren to gain access to Formula 1 business, but McLaren thought the offer was too low, one of the people said.
The Audi supervisory board examined options on Wednesday as part of the plan for entry into Formula 1, said the people headed by CEO and long-time racing fan Markus Duesmann. The company may not decide whether to team up with McLaren until next year, and could also form alternative partnerships with Red Bull Racing or Williams Racing, they said, declining to discuss the details of the negotiations.
McLaren’s line of funders, including Ares Management Corp. and Saudi Arabia’s Public Investment Fund, have different views on the pursuit of a sale or listing by a blank check company, one of the people said.
Audi “routinely weighs up different ideas for cooperation,” said a spokeswoman and declined to comment. McLaren did not immediately respond to a request for comment.
Audi is pursuing the world’s most prestigious racing series to showcase electric vehicle technology as Formula 1 becomes more sustainable, people said. A connection could run into hurdles that coincide with Volkswagen’s broader strategy to reduce complexity for Europe’s largest automaker, whose attempt to challenge Tesla Inc. faces fierce competition amid a range of EV models.
The story goes on
On the racetrack, Audi would have to compete with Mercedes, which dominates Formula 1 and plans to maintain its lead as the series prepares for the electric car age.
The plans for Audi and the VW Group’s potential sister brand Porsche to compete in Formula 1 as early as 2026 depend on them going fully electric and sticking to cost caps, people said. Current racing cars are powered by high-performance hybrid engines, and Formula 1 is committed to reducing its carbon footprint to zero by 2030.
Rationalization push
VW boss Herbert Diess tried to slim down the carmaker’s conglomerate structure and become more agile as part of an asset review announced five years ago. Efforts have largely stalled. A plan to separate brands like Ducati and Lamborghini did not progress, and VW expanded its brand network with the acquisition of the US truck manufacturer Navistar International Corp.
The automaker currently has more employees than ever before and employs 674,800 people worldwide, according to the earnings report for the third quarter, dwarfing Tesla’s workforce of around 71,000.
A deal with McLaren would have to overcome a number of economic challenges. The boutique sports car maker has been struggling financially since the pandemic disrupted its production and Formula 1 circuit. Last year the company sold its headquarters in Woking near London and leased it back; sold a stake in its racing unit to a consortium of US investors; and raised money from new and existing investors, including sovereign wealth funds from Bahrain and Saudi Arabia.
Most read of Bloomberg Businessweek
© 2021 Bloomberg LP
The post Audi is considering a connection with McLaren in order to get into Formula 1 after the first offer first appeared on monter-une-startup.
