It looks like the Bahrain Sovereign Wealth Fund (Mumtalakat Holding Company) will purchase the rest of McLaren in the coming days. That means they will be the sole owner of McLaren, including it’s Formula One team. Sky Sports reports that the deal will be announced in the coming days. Mumtalakat already owned 80% of the team so this purchase would finalize the process of taking full ownership of the company.
According to Shaikh Abdulla bin Khalifa Al Khalifa, Chief Executive Officer of Bahrain Mumtalakat Holding Company:
Today’s announcement is testament to the diligent steps that have been taken in what is a comprehensive and long-term plan with our partners to deliver an optimal governance structure as the Group continues to design and deliver the world’s most innovative and exhilarating supercars.
https://www.planetf1.com/news/mclaren-group-bahrain-sovereign-fund-ownership
Interesting that his remarks refered to supercars but not the iconic racing team…
I think the rising valuations of F1 teams drove this decision. They already invested a lot in McLaren, especially over the past four years, taking full ownership makes sense. Plus, team values continue to rise so Mumtalakat might want to buy now at a lower price than later when it’s even higher. While that assumes a continued appreciation of the company as a whole, it looks to be a safe bet in the short term.
Where things go from here is unknown at this time. There has been talk of taking McLaren public, just as Williams Grand Prix Holdings and Ferrari have in the past. Mumtalakat could hold McLaren for a few years then sell it off if goes public. That may depend upon the market for exotic/supercars though, which can be fickle. Just ask Aston-Martin about much of a challenge it is to remain an ongoing concern in that market.
They could also hold on to the team as sole owner and enjoy the benefits of F1’s new and sustainable business model. Teams are now profitable and valuable. Moreover, the technologies they develop can be spun off, licensed, or produced in-house to generate additional revenue. So it could make sense for the Bahrainis to hold on to McLaren long-term and reap the financial rewards over time.
Regardless, it looks like the ongoing trend of investing in F1 teams will continue. As we’ve seen with Williams, Alpine, and Sauber; even struggling teams can attract investors. A team on the rise like McLaren is an even more attractive investment. This is probably why Gainbridge is keen on backing Andretti Global in their bid to join F1.
Many facets to this story.
The whole subject and history of oil-rich countries backing Formula One teams is a related subject I’ll explore in separate posts. While the House of Al Khalifa (Bahrain) is in the news right now, the House of Saud (Saudi Arabia) and the House of Nahyan (Abu Dhabi) are prominent too. It’s nothing new but the level of investment, involvement, and presence is much higher now. The sovereign wealth funds have billions to invest and are looking to put that money into a diverse portfolio of assets that will generate returns over time. Motorsports, especially F1, are now benefiting from this trend.
Is it good for the sport and how long will it last? Stay tuned and I’ll write about that as well.
