Abu Dhabi company announces Dh613 million joint venture with Daimler to take control of reigning world title holder.
Aabar in buyout of Brawn GP race team
ABU DHABI // The Government-owned company Aabar Investments yesterday announced the takeover of Brawn GP, the team that won both this year's Formula One constructors' championship and the drivers' title. The new joint venture, between Aabar Investments and Daimler, the German owner of Mercedes-Benz, was worth "more than £100 million" (Dh613m), according to Khadem al Qubaisi, the chairman of Aabar. It will see Brawn GP rebranded as Mercedes Grand Prix.
"For us at Aabar and IPIC [International Petroleum Investment Company, Aabar's parent firm], this is good marketing and good for tourism in Abu Dhabi," Mr al Qubaisi said. "There are many opportunities for the team to come here and use Yas Island circuit." Team officials said the arrangement would offer stability after a tumultuous 12 months for Brawn GP, which at the start of the year had looked on the brink of collapse.
Yesterday's announcement sees Aabar and Daimler take a 75.1 per cent stake in Brawn GP, of which 45.1 per cent is held by Daimler and 30 per cent by Aabar. The remaining 24.9 per cent stake has been retained by the current owners, led by the team principal Ross Brawn, who remains in charge. Brawn said the deal capped an incredible year that had seen the team go "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 Daimler and Aabar's offer to buy our team, which will secure its future".
Based in Northamptonshire in England, Brawn GP was formed by a management buyout after Honda ended its Formula One operations at the close of the 2008 season. Despite its early problems, the team went on to defy expectations by winning six of this year's first seven races in a season that culminated in its British driver, Jenson Button, securing the drivers' world title at the penultimate race in Brazil prior to this month's inaugural Abu Dhabi Grand Prix at Yas Island.
Brawn GP also won the constructors' title in Brazil. Both Button's car and that of his teammate, Rubens Barrichello, were powered by Mercedes engines. Nick Fry, the chief executive of Brawn GP, who is also staying on, said the deal offered the team "stability and security for the future". However, he said it would not significantly affect the team's performance in the 2010 season. He said that was because current Formula One rules restricted the amount that could be spent on developing the car. "There's a limit to how much money we can deploy in trying to be successful. That's the amount we would be spending anyway," he said. "The 2010 development is extremely strong."
A more important long-term effect of the agreement, he said, was that it would give the team "access to additional skills" at Mercedes and Daimler. Also, the team would be likely to benefit from investment in better development and testing facilities. Mr Fry added that Aabar's involvement meant it was likely the team would become more prominent locally. "I think this is very early days, but given the ownership of the team, I have no doubt our presence will be stronger in the region than it has been until now."
Despite Brawn GP's F1 success this year, the drivers for the new Mercedes Grand Prix team next year have not been announced, and Mr Fry yesterday declined to speculate on whom the team would hire. Barrichello, the Brazilian driver who came third in this year's championship, has already left Brawn GP and signed with Williams for 2010. Reports indicate the team may not be willing to agree Button's salary demands.
Daimler also announced yesterday that by 2011 it would sell its 40 per cent stake in McLaren Group back to the British company, which runs the McLaren Grand Prix team. However, Mercedes may continue to supply engines to McLaren until 2015. Aabar Investments also said yesterday it plans to increase its own 9.1 per cent stake in Daimler AG, to 15 per cent. "We are happy with the relationship between us. In the next few months, you will see us do other deals together. We are looking to buy companies together that will add value to us and Daimler as well," Mr al Qubaisi said.
Yesterday's announcement was the latest in a number of F1-related investments by UAE firms. In 2005 Mubadala Development, another Abu Dhabi Government investment company, bought a five per cent stake in the Italian car maker Ferrari. In addition, Mubadala and Etihad Airways both sponsor Ferrari's Formula One team. Aabar's investment is the latest in a series of hi-tech deals that include the company's decision in July to pay US$280m for 32 per cent of Virgin Galactic, a commercial flight subsidiary of the Virgin Group. As part of that deal, Aabar said it might invest an additional $100m in a satellite launch and has plans to build spacecraft in Abu Dhabi.
firstname.lastname@example.org email@example.com * With additional reporting by Asa Fitch