Bahrain’s sovereign wealth fund has reached an agreement to take full ownership of the McLaren Group, one of the most respected names in British manufacturing, after years of negotiations aimed at putting the company on a solid long-term footing.
Sky News understands that McLaren will announce later on Friday that the recapitalisation of the supercar manufacturer and Formula 1 shareholder has been completed.
The deal will pave the way for McLaren to seek a generational partnership with a global auto giant that could also involve Mumtalakat divesting a minority stake in the Woking-based company.
In an article published on Sky News, Paul Walsh, McLaren’s chief executive, said the deal would strengthen the company’s governance and ownership structure.
“This will allow us to focus more on delivering on our long-term business plan, as well as making investments in new products and technologies, while exploring conceivable technical partnerships with industry partners,” said Walsh, former CEO of Diageo.
Mumtalakat said the final touch of the transaction “crystallizes the next phase of the company’s journey to build its leadership position in the luxury supercar and motorsports sectors. “
“This reorganisation and optimised new design positions McLaren for good luck and opens up strategic avenues, adding the exploration of new partnerships to the company’s expansion in the coming years. “
McLaren, whose road car models come with the Artura Spider, P1 and Senna, announced on Friday morning that Zak Brown, head of its racing division, had signed a new long-term contract.
As a result of the recapitalisation agreement, McLaren’s remaining minority shareholders agreed to convert their capital into warrant instruments.
The new contracts will have the economic rights to take advantage of a long-term “liquidity event” such as an initial public offering or the sale of McLaren, but will be classified as shares.
McLaren Racing, the department that directly houses F1 and other racing operations, has its own external shareholders following a deal reached during the pandemic.
The Woking-based company’s complicated monetary design has had a crippling effect on the ability of global automotive teams to establish a long-term partnership with it in recent years.
Simplifying this design will likely pave the way for a generational partnership with a car supplier (OEM) in the coming years as McLaren moves towards a hybrid and electric vehicle company.
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Bankers have been talking about the prospect of an initial public offering (IPO) of McLaren for years, but repeated demands for funding from its own shareholders and supply chain issues that have hampered its recovery mean that an IPO will most likely have to wait several more years.
During the COVID-19 pandemic, the company was forced to undertake a far-reaching restructuring that resulted in the elimination of many jobs and the acquisition of very large amounts of equity and debt to fix its balance sheet.
McLaren has also made a number of corporate transactions since the start of the pandemic, when it applied for a loan from the government, a request that ministers rejected.
Walsh oversaw a £170 million lease sale of its impressive Surrey headquarters.
In 2021, it also sold McLaren Applied Technologies, which generates profits from sales to businesses.
Founded in 1963 by Bruce McLaren, the group is one of the most notorious in British motorsport.
In nearly a century of F1 racing, it won the constructors’ championship eight times, while its drivers included the likes of Mika Hakkinen, Lewis Hamilton, Alain Prost and Ayrton Senna.
In total, the team won Grand Prix, 3,000 Indianapolis 500s and the 24 Hours of Le Mans in its early days.
The company saw its separate divisions reunited after the departure in 2017 of Ron Dennis, the veteran McLaren boss who had led his F1 team through the most successful generation in its history.
Dennis sold his stake in a £275 million deal following a bitter dispute with other shareholders.