Published on December 22nd, 2020 | by Subhash Nair0
Will INEOS Replace Petronas as Mercedes-AMG F1 Title Partner?
Arguably one of the most successful Formula 1 teams in history, Mercedes-AMG Petronas has shifted its ownership structure. Principal Partner INEOS has become an equal partner of the Formula 1 team, splitting ownership between Daimler AG, Toto Wolff (Team Principal and CEO) and itself. Petronas has been the team’s Title and Technical partner since 2010. The day the INEOS ownership announcement was made, Petronas issued a press release celebrating their 7th consecutive double F1 Championship win after a successful 2020 season. Why might that be?
Well, INEOS is a rather huge chemical company (that also happens to produce a classic Defender of their own), and nearly a quarter of its business revolves around fuels and lubricants. Naturally, anyone would wonder why an equal partner of a highly visible Formula 1 team doesn’t even have its name on the title.
Now, we’re not saying things will definitely change between Petronas and the Formula One Team. However, we’re also saying INEOS taking over ‘title partnership’ is within the realm of possibility. Especially when you consider that Petronas’ contract with the team is set to expire this year. The last time the Petronas sponsorship was set to expire in 2018, we knew by the middle of 2017 that they’d renew the contract. A similarly early announcement was made when the contract was set to expire at the end of 2014.
Interesting times ahead. Lewis Hamilton’s contract with the team also hasn’t yet been renewed and Bottas’ will expire next year. Here’s the press release from the official ownership announcement.
The Mercedes-AMG Petronas Formula One Team is delighted to announce that INEOS will become a one third shareholder in the team, which will be owned in three equal parts by Daimler AG, INEOS and Toto Wolff.
The INEOS one-third stake in the team will be in addition to its existing role as Principal Partner. In parallel, Daimler will reduce its current 60% shareholding and Toto Wolff increase his current 30%, in order to create three equal partners in the company.
Since the Mercedes-Benz works team returned to Formula One in 2010, continuous strategic investment, sporting commitment and commercial growth have built the organisation into a leader in world sport with an unprecedented seven consecutive double world championships since 2014.
Anchored since 2010 by an iconic and unbroken title partnership with PETRONAS, the team enjoys the support of a portfolio of loyal and prestigious partners, strong commercial revenues and generates the leading share of audience and exposure in Formula One.
From 2021, the business landscape of Formula One will be transformed by new Financial Regulations which will enable teams to achieve standalone financial sustainability in the years ahead. The team will be strengthened by closer alignment to Mercedes-AMG, the performance division of Mercedes-Benz, and has already begun to diversify through its new business division Applied Science, which leverages high-performance engineering capability for innovative projects beyond motorsport.
The team will remain the works Formula One team of Mercedes-Benz and will continue to race Mercedes chassis and power units in the coming years.
Under the new shareholding structure, Toto Wolff will continue in his role as Team Principal and CEO for a further three years, leading the executive operations of the company and the racing team. He will have the subsequent opportunity to transition to a new executive function within the organisation when he decides it is the right time to do so.