Lewis Hamilton, Mercedes, Silverstone, 2020

Mercedes sells stake in team to Ineos as Wolff extends contract as team principal

2021 F1 season

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Daimler has announced changes to the ownership of its Mercedes Formula 1 team, selling stakes to sponsor Ineos and team principal Toto Wolff.

Alongside the new structure announced on Friday, Wolff confirmed he will remain as team principal and CEO for the multiple world championship-winning outfit for the next three years.

Daimler will reduce its 60% ownership of the team as it, Ineos and Wolff each take one-third stakes in the British-based outfit.

Daimler and Mercedes chairman Ola Källenius described the petrochemicals manufacturer Ineos as a “prestigious investor” who sees “real potential for the future growth and development of the team.”

Källenius insisted the team’s appetite for further success has not been diminished by its record-setting seven consecutive constructors and drivers championship titles.

“We remain firmly committed to Formula 1,” he said, “and the forthcoming cost cap along with the new shareholding structure put us in an even stronger position for continued success. With an even closer alignment to our Mercedes-AMG performance division beginning in 2021, and Toto’s continued leadership in the coming years, the future is bright for Mercedes-Benz in Formula 1.”

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Wolff’s future at the team has been the subject of speculation for much of the year. Announcing his increased stake in the team today – he previously held a 30% share – Wolff said Mercedes is “like a family for me.”

“We have been through so many highs and lows together that I cannot imagine working with a better group of people in this sport – and I am very happy to continue together into this new era.”

Ineos joined Mercedes as a “principal partner” in a five-year deal earlier this year. Chairman Jim Ratcliffe discussions to increase their involvement began soon after.

“This is a unique opportunity to make a financial investment in a team at the very top of its game, but which still has rich potential to grow in the future,” he said. “We could not wish for better partners than Mercedes-Benz, and a team of proven winners led by Toto.”

Mercedes is yet to confirm whether Lewis Hamilton will continue to drive for the team next year. However the seven-times world champion indicated last weekend he hopes to agree a new deal before Christmas.

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Keith Collantine
Lifelong motor sport fan Keith set up RaceFans in 2005 - when it was originally called F1 Fanatic. Having previously worked as a motoring...

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45 comments on “Mercedes sells stake in team to Ineos as Wolff extends contract as team principal”

  1. Smart move by Mercedes.
    It will be seen as their team (marketing) but based on a third share, monetising part of its current value and locking in Toto (I assume that means Lewis – the big price – as well).

    1. Yeah, it makes quite a bit of sense.

    2. @coldfly Smart move by Mercedes.

      It will be seen as their team (marketing) but based on a third share, monetising part of its current value and locking in Toto

      Indeed. Even paving the way for a smooth exit down the line. This all explains some of Wolff’s initial comments after Kallenius took over, to how they were on the very best of terms later. Same with his ‘I might retire, this is too taxing’ -fakery.

    1. But they haven’t been sold. Ineos has bought a stake.

      1. A big stake, and made Toto the power player removing Källenius from being his boss.

        It would be wrong to say that Ineos have bought the team but Daimler no longer have a controlling stake either.

    2. Yes, it shows the people who got that one out did see a bit of the picture – the talks about sale of a larger part of the team to Ineos for the future – but took a leap to come to the wrong conclusion @tifoso1989.

      1. It could still happen. For all we know this is just phase I of Mercedes’ exit from F1 as a constructor @bascb

        1. Well, it could be. But on the other hand, that doesn’t really change with this @force-maikel. If they want out, they will go. And it will probably have less to do with the sport, but rather with where the industry is headed.

        2. I suspect you’re right. My guess (noting I often guess incorrectly) is Mercedes will retain their High Performance Powertrains division, which is the engine manufacturing part, and will gradually wind back on having a manufacturer’s team (at least by name). Then they could supply as many teams (including Red Bull and AT) as are prepared to buy their engines and gearboxes.

      2. Or it could be that Ineos were in advanced talks to buy the entire team, but they couldn’t come to terms, or Mercedes and Wolff ultimately decided on a different approach that was better for the team and them.

        1. All of that COULD be @aiii, but how likely is it.

          This step makes huge sense, Mercedes keeps a controlling stake in the team. Ineos can invest, and with Wolff also on 1/3 it makes for a stable partnership to keep Toto on board. And yeah, sure, in a few years the situation might be different.

      3. @bascb
        I know the difference between buying a stake and the whole team. Wolff rejected the report and said many things were made up: “Daimler has no intent in giving up the team, and Ineos has no interest in buying a majority of the team”.

        There was some rumours before this one suggesting that Daimler and for financial reasons want to have a smooth exit from Mercedes by keeping a minority stake in the team and having their name still on it. That way they will cut costs and still have F1 as a marketing platform.

        The fact that he said that the team will still be Mercedes Petronas AMG team and Ineos already buying a stake in the team is just a confirmation of the already stated scenario.

        “the future of the team is absolutely clear: It’s the Mercedes Petronas AMG team and nothing is going to change that”

        1. Off course it is a confirmation of Mercedes taking a step back @tifoso1989. But that doesn’t make it less true what Wolff said. Nothing is his statement was not true.

          Mercedes are not giving up on the team, they still own a third. And Ineos did not buy a majority, it bought a larger share.

        2. Well, to be clear-er, in 12 days time the Mercedes-Petronas contract terminates and the cars revert to silver.

          An interesting scenario with Petronas is that McLaren in ’21 may well use Petronas products, as used by Merc F1 in their power units. In ’20 McLaren used Castrol because it was used in the Reggie PU’s. They will have Gulf Oil sponsorship, but do NOT use their products in their race cars [it may well be for the road cars, as Gulf Oil is apparently doing re-branding of service stations in the UK].

          Methinks the 33.3[r]% each for Daimler/Ineos/Wolff is a smart business move:-
          * Daimler has reduced $$ exposure to “ICE” motorsport whilst having strategic marketing based on 7yrs winning success. There still will be world sales of new & late model pre-owned AMG ‘ICE’ models.
          * Ineos – UK based International Petrochemicals corporation with Chairman/CEO Sir Jim Ratcliffe. One would think would be a testbed [+ marketing] for future synthetic fuels, particularly as a replacement for petrol & oils that will be banned from sale in many countries, circa 2035, as countries prepare to attain 2050 climate/emissions target.

          * Toto has apparently re-signed for a further 3yrs. He already has a 30% stake, so only athe small increase. F1 has major rule changes in 2022 & 2026 and presumably his contract ends approx mid-way. Toto has said he knows his successor [and rightly not saying whom]. See it as the 3yrs is the period he believes to bring that person to a level to transition. Smart thinking with a large stake to lose.

  2. Great move to increase their asset appreciation and value growth margin while keeping market stability raising growth.

    I have no idea what I’m doing. Cars go vroom.

    1. Brilliant. Chuckled hard on that. Well played!

  3. So the thing they told us definitely wasn’t going to happen has happened.

    1. petebaldwin (@)
      18th December 2020, 10:42

      To be fair, technically what Wolff said was technically accurate.

      “Daimler has no intent in giving up the team, and Ineos has no interest in buying a majority of the team and calling it like this and I have no reason to depart from my shareholding.”

      1. Toto wasn’t lying!

      2. Yeah, as @petewaldwin mentions, the idea that Mercedes would sell the team to ineos and quit the sport was not accurate @red-andy. Mercedes still remains a controlling share, Toto remains and even increases his share and yeah, Ineos invests and gets a larger part of the cake.

        But yeah, bit of a play on words, guess we have to admire the job they did formulating that statement accurately to deny but leave open that they were selling a part of the team.

        1. Yes, with hindsight it was quite a clever ‘non-denial’ by Wolff, rubbishing the idea that Ineos were going to take a controlling stake without commenting on the broader angle that Daimler were going to be selling *some* of their stake to Ineos.

        2. You keep saying Merc have a controlling share – they kept just ⅓ of the shares – Are Ineos or Wolff shares non-voting?

      3. Indeed, classic political speak :)

        1. As most politician do.. not flat out lying but just be creative with the facts..
          ( well except Trump that is, that one is lying whenever his lips are moving)

  4. I suspect an Hamilton contract announcement in due course. This would have been in the works for a while and could easily explain why an expensive contract would be delayed.

    If Toto has signed for 3 years, I can see Hamilton’s contract aligning with it.

    1. @chimaera2003

      I wonder how this impacts Hamilton’s climate change concerns. If Ineos was a major sponsor then it wouldn’t seem a major change.

      I would be surprised if it was that important. Normally money and ambition win over ethics. But you never know.

      1. @slotopen “A principle isn’t a principle until it costs you something.”

        Having said that it would require some serious mental gymnastics to tell people that you were happy to drive an F1 car but suddenly couldn’t once Ineos became involved. So probably no material impact if climate change is a serious concern.

        1. Hamilton to sign only with a “can quit at any time” clause, so that he can quit once 100 wins / 8 championships / most laps led / getting too much heat because of Ineos / whatever other target is reached.

  5. So much for stopping before going from great to merely good, or already having identified a potential successor.

    Wolff is a great team principal and business man. But he brings his own set of smoke and mirrors, thats for sure.

  6. Hamilton extends contract confirmed.

  7. Smart move by Merc. Locks in a large chunk of the benefit they have accrued though the years. They can use that to the benefit of the employees who get displaced by the budget cap, or for any other purpose as they deem fit.

    Now, Toto becomes an equal owner of the Merc team. That is a big upgrade for him. Toto’s power is undoubtedly higher than before. He is putting himself in prime position to call the political shots for a long time ahead.

    I wonder if this list needs updation (https://www.racefans.net/2020/08/19/who-is-f1s-most-powerful-figure-in-the-post-ecclestone-era/) now.

  8. On top of the re-focusing of the name change announced earlier this year from Mercedes F1 to AMG F1. I think this is a further distancing of Daimler Benz from what they see as a non productive expense. I would expect similar from Renault sooner rather than later.

    1. Renault Sport F1 could be renamed to something really wacky, like Alpine F1.

      I shall write to the chairman instantly…

      1. @mrfill Perhaps if you read the article you will get a better understanding of what’s going on.

  9. Prestigious, Ineos? A moniker that follows them, I read it everywhere, sounds defensive to me.
    Ineos bought into a cycling team with the most sophisticated and ingenious medical team (not doping). They are definitely not in court for ordering testosterone to the manchester velodrome, the doctor in question was not even aware testosterone could boost athletic performance.

    1. lol, right? Just like a Toto is a super straight talking character. If things had turned out differently earlier in life for Toto, I could see him being a really terrifying pimp. He seems really sweet to the girls on the surface, but the first time they mess up with a big client he gives them the “Petyr Baelish talk” from GOT.

  10. Whilst I think that all of the above is good, there is one area of focus that has been totally missed.

    Ineos came in when the budget cap was ratified. Ineos are a world leader in petrochemical and exotic materials research. How will a business the size of the Mercedes F1 team conduct such research under a budget cap? It can’t therefore it has an industrial behemoth to do the research outside of the budget restrictions and simply sell them the materials at a reasonable cost.

    This partnership is dressed up in many ways but principally, this is a mechanism for the F1 team to maintain a cutting edge on R and D whilst operating within the budget cap.

    Expect the next generation of F1 composite materials and exotic metalurgy to come through Mercedes F1 partnership with Ineos

  11. Does this sale include Brackley and Brixworth?

    1. Brixworth is a separate legal entity it seems to remain owned by Daimler.

  12. I think we can all agree that Wolff is the smartest and most capable man in F1.

  13. who sees “real potential for the future growth and development of the team.”

    hahah, that made me laugh. Because usually you hear this about a team with the opposite results as Mercedes has been having the last 7 years

  14. Coventry Climax
    19th December 2020, 12:38

    I think @Marvin The Martian has a very good point.
    From the moment Toto joined F1 (Williams, which he readily left again and in a way I personally didn’t really think very decent), I’ve had a dislike for this man. And the dislike has been growing ever since. He does not love the sports for the sports, he loves it as a vehicle to get his own, personal success. I would not be surprised to hear he lobbies for the introduction of handing very large silver cups to team managers at the end of each race, and preferrably larger than what the drivers get.
    What started out as a mere enthusiasts sporting event in the 50’s, was soon discovered by companies as an advertisement platform. Invest some, and if done right, earn some. But Toto takes it to the next level and is on the forefront of turning F1 into a business competition exclusively, under the disguise of ‘sports’.
    As we see everywhere, once commerce gets there hands on something, it is destroyed. The internet being a good example.

  15. Toto is a ruthless snake. Anyone who buys the “supportive mentor and culture of freedom to make mistakes” character he plays on TV is a fool.

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