John Malone's Liberty to Acquire Formula One, Chase Carey to Become Chairman
Private equity firm CVC owned only a 35 percent economic stake but has controlled the racing circuit thanks to special voting rights.
John Malone's Liberty Media Corporation has agreed to acquire global motor sports business Formula One.
The sale values Formula One at $4.4 billion and will occur in stages, with an initial purchase of $746 million for an 18.7 percent minority stake. Enterprise value for the racing circuit is set at $8 billion. Formula One will fall under the umbrella of Liberty Media Group.
Former 21st Century Fox president and COO Chase Carey will become chairman of F1, replacing Nestle chairman Peter Brabeck-Letmathe. The 85-year-old Bernie Ecclestone will remain CEO. The deal still needs clearance from antitrust authorities and European sports regulatory bodies.
"We are excited to become part of Formula One," Liberty Media CEO Greg Maffei said Wednesday in a statement. "We think our long-term perspective and expertise with media and sports assets will allow us to be good stewards of Formula One and benefit fans, teams and our shareholders. We look forward to working closely with Chase Carey and Bernie Ecclestone to support the next phase of growth for this hugely popular global sport."
Media mogul Malone had looked at a deal for Formula One either through his Liberty Global in partnership with Discovery Communications or Liberty Media, which recently reclassified into three tracking stocks: one for the Atlanta Braves baseball team, another for SiriusXM Radio and the third for the company's various minority stakes. Discovery and Liberty Global previously bought a stake in the company behind the Formula E electric racing circuit.
Silver Lake, the private equity firm that partially owns talent agency WME-IMG was also considering an investment in F1, but its recent takeover of the Ultimate Fighting Championship franchise was seen as having dampened its appetite to pursue another big deal near-term.
Others who were thought to have been interested in buying a stake in F1 include Apple, as well as the Qatar Sports Investments, which owns French soccer club Paris Saint-Germain.
Private equity firm CVC bought a controlling stake in Formula One in 2006 for around $1.7 billion but has since reduced it. F1 is owned by Delta Topco, whose ownership structure is complex. CVC owns a 35 percent economic stake, but controls the circuit via special voting rights. U.S. fund Waddell & Reed owns just under 20 percent, while Ecclestone also holds a stake.
CVC has in the past tried to take Formula One public, but those plans stalled.