Liberty Media Corporation and CVC Capital Partners have announced that Liberty Media has agreed to acquire Formula 1 from a consortium of sellers led by CVC.
The consideration comprises cash and newly issued shares in the Liberty Media Group tracking stock (LMCK) and a debt instrument exchangeable into shares of LMCK. The transaction price represents an enterprise value for Formula One of US$8.0bn and an equity value of US$4.4bn
The acquisition will be effected by Liberty Media acquiring 100% of the shares of Delta Topco, the parent company of Formula One. However, the acquisition is subject to the satisfaction of certain conditions.
Liberty Media has completed the acquisition of an 18.7% minority stake in Formula One for US$746m, funded entirely in cash. Prior to completion, CVC Funds will continue to be the controlling shareholder of Formula One.
After completion of the acquisition, Liberty Media will own Formula One and it will be attributed to the Liberty Media Group which will be renamed the Formula One Group. The consortium of sellers led by CVC will own approximately 65% of the Formula One Group’s equity and will have board representation at Formula One to support Liberty Media in continuing to develop the full potential of the sport. In addition, a CVC representative will be joining the Liberty Media board of directors.
Chase Carey has been appointed by Delta Topco and will serve as the new chairman of Formula One, succeeding Peter Brabeck-Letmathe, who will remain on Formula One’s board as a non-executive director. Bernie Ecclestone will remain Formula One’s CEO.
“We are excited to become part of Formula One,” stated Greg Maffei, president and chief executive officer of Liberty Media. “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.”
The Teams will be given the opportunity to participate in the investment in Formula One, and the detailed terms of that investment will be agreed in due course. Certain teams have already expressed an interest in investing after completion of the acquisition.
Commenting on the sale, FIA President Jean Todt said: “While it remains to be seen how this acquisition will influence the promotion of the FIA Formula One championship, we welcome this long-term investment in Formula One by a company that has such a broad portfolio of sports, media and entertainment businesses. As motor sport’s governing body and regulator we acknowledge Liberty Media’s wide expertise in these fields and we look forward to working in close partnership with them in the future in order to further develop Formula One and bring it to new generations of motor sport enthusiasts around the world.”