Aabar, Daimler acquire Brawn F1 team

Bradley Hope

• Last Updated: November 16. 2009 4:28PM UAE / November 16. 2009 12:28PM GMT

ABU DHABI // Two major investors including Abu Dhabi’s Aabar Investments have bought a majority stake in the championship winning Brawn GP Formula One team, to be renamed Mercedes Grand Prix.

Aabar, one of the most active international investors in the Gulf, has combined with the German car maker Daimler to acquire a 75 per cent stake in Brawn GP, the winner of this year’s constructors and drivers championships, the companies said today. They declined to provide a purchase price.

“Aabar is delighted to join forces with Daimler and its world leading brand Mercedes-Benz in order to create a new Formula One team, which follows in the footsteps of the long-standing and successful tradition of the famous ‘Silver Arrows’,” said Khadem al Qubaisi, the chairman of Aabar. The Silver Arrows was the unofficial name of the champion Mercedes-Benz team between 1934 and 1939. Their cars were also known by that name during the 1950s.

Aabar will take a 30 per cent stake in Brawn GP and Daimler will acquire 45.1 per cent, with 24.9 per cent remaining with the current owners, the companies said in a joint statement today. Aabar owns 9.1 per cent of Daimler, making it the largest shareholder in the company.

The new team will continue to be led by Ross Brawn, an owner of the team and a veteran race car engineer. The engine teams will be co-ordinated by Mercedes-Benz Motorsport. Daimler already owns 40 per cent of the McLaren team through its Mercedes unit.

The acquisition comes just two weeks after Abu Dhabi hosted its first Formula One race at a new, state of the art circuit on Yas Island, which has boosted the emirate’s profile in the world of motorsport.

Mubadala Development, which owns 5 per cent of the Italian car maker Ferrari, and Etihad Airways are already major sponsors of the Scuderia Ferrari F1 team. Mubadala, a government-controlled investment company, financed the construction of the circuit on Yas Island and Aldar Properties, Abu Dhabi’s largest property developer, is building the massive Ferrari World theme park next door.

The acquisition of Brawn GP caps a dramatic year for the team, which started out under the ownership of the car maker Honda. It was then taken over by Mr Brawn after Honda withdrew from F1, and has won both the team and driver championships, a Formula One first for a debutante team.

“Brawn GP has been through an incredible journey over the last 12 months,” Mr Brawn said. “From fighting for our survival to forging a strong relationship with Mercedes-Benz high performance engines, winning both the constructors and drivers world championships, and now accepting Aabar and Daimler’s offer to buy our team, which will secure its future.”

Aabar, originally known as Aabar Energy, started out as an energy investment firm in 2005, but transformed itself last year into a major government investment vehicle.
It has made a streak of high-profile investments, including buying a 9.1 per cent stake of Daimler in March this year for €1.95 billion (Dh10.67bn). In July, it bought 32 per cent of Virgin Galactic, a commercial space flight subsidiary of the Virgin Group, for US$280 million (Dh1.02bn). As part of that deal, Aabar said it may invest an additional $100m in a satellite launch operation and has plans to build a spaceport in Abu Dhabi.

Aabar has recently made numerous other investments in financial services and manufacturing companies in Europe and South America. It also owns a 4 per cent stake in Tesla Motors, an electric car manufacturer, and has property holdings in Abu Dhabi.

Aabar is 70 per cent owned by the Abu Dhabi-based International Petroleum Investment Company.

with reporting by Asa Fitch

bhope@thenational.ae

Aabar - The Deals

November 2008: Aabar makes its first purchase following its transformation from an energy firm into a global investment vehicle, buying two plots in the Al Raha development in Abu Dhabi for Dh500 million (US$136.1m) from Tasameem Real Estate. It says it will build up to four residential towers there.

December 2008: Aabar agrees to buy AIG Private Bank, part of the US financial services firm AIG, for $254m. The bank is intended to become an independent financial institution based in Switzerland with operations in Hong Kong, Shanghai, Singapore and Dubai, and is renamed Falcon Private Bank.

February 2009: The company buys 12 towers to be developed on six lots on Reem Island in Abu Dhabi for Dh5 billion, a price that includes the cost of building them. On completion, Aabar says it owns four commercial buildings and eight mixed-use towers with a floor area of 361,397 square metres.

March 2009: Aabar buys 9.1 per cent of Daimler, the German car maker, for €1.95bn (Dh10.67bn). Aabar and Daimler plan to embark on strategic ventures together as part of the purchase, including investments in electric cars and the development of new car-making materials.

May 2009: Aabar signs an agreement in conjunction with Green Emirates, a local property firm, to buy 14 plots of land in Abu Dhabi for Dh2.7bn. The plots were in the Aldar Al Raha Beach development, the Reem Developers’ Rawdhat Abu Dhabi project and the Sorouh Saraya project.

July 2009: Daimler says it will sell 40 per cent of its stake in Tesla Motors, an electric car manufacturer, to Aabar. The deal gives Aabar a 4 per cent share in Tesla and is meant to further its strategic aim of investing in emissions-reducing technologies with Daimler.

July 2009: Aabar and Berndorf, an Austrian manufacturing firm, start a joint investment company called ABAG Aktiengesellschaft, to be incorporated in Austria. The company, two-thirds owned by Aabar, is to invest in “medium-sized, internationally orientated technology-based companies”, as well as property portfolios in Europe.

July 2009: Aabar buys a 32 per cent stake in Virgin Galactic, the commercial space flight firm, for about $280m. At the same time, Aabar says it will invest $100m in a satellite launch company and plans to build a spaceport in Abu Dhabi.

August 2009: The company signs an agreement with the Algerian government to build a “network of vehicle and engine manufacturing plants” in co-operation with five German firms, including Daimler. Under the agreement, up to 10,000 cars and lorries could be assembled in Algeria, starting from next year.

October 2009: Aabar makes a $328m investment in Banco Santander of Brazil through the purchase of shares listed in the US.

November 2009: Daimler and Aabar together buy a 75.1 per cent stake in the Brawn GP Formula One team. Aabar is to own 30 per cent, while Daimler is to own 45.1 per cent. The value of the deal is not disclosed.

* Asa Fitch

afitch@thenational.ae