What's really going on with Mercedes' Alpine buy-in talks
It’s been known for a while that a stake in the Alpine Formula 1 team is up for grabs, with minority shareholder Otro Capital looking to offload its interest.
Having purchased a 24% buy-in, back in 2023, Otro and its influential celebrity backers, including actors Ryan Reynolds and Michael B. Jordan, believe the time is right to cash out with F1 team valuations upwards of $1 billion.
Several parties have thrown their hat into the ring to buy Otro's shares, with former Red Bull boss Christian Horner being the highest-profile name linked to a possible deal over the winter.
Indeed, talks were understood to have reached an advanced state in a move that could have given Horner a route back into F1 later this year.
However, the situation took an intriguing twist over the Australian Grand Prix weekend when it emerged that Horner was facing competition from former rival and Mercedes boss Toto Wolff.
As first reported by The Daily Telegraph, Wolff had thrown his and Mercedes’ hat into the ring as a party interested in going for the Otro shares.
The move triggered plenty of speculation about Wolff himself looking to expand interest in the grid, or even of Mercedes starting to make moves towards having a full-blown second squad.
However, the situation seems to be much less dramatic than that, and, is in fact, much more about long-term security than a wholesale change of direction for Mercedes in F1.
A Mercedes deal, not a Wolff one
While Wolff is abreast of the developing situation regarding the Alpine shareholding being up for grabs, what has become clear is that any consideration for a tie-up comes from the Mercedes perspective rather than his personal one.
Wolff has more than enough on his plate as a minority shareholder at the Mercedes’ works squad – and all indications point to a future where he is shoring up the Silver Arrows squad rather than getting his fingers into more pies.
Last year Wolff completed a $300 million deal for CrowdStrike CEO and founder George Kurtz to take a 15% stake in Wolff's holding company, Motorsport Invest Limited (MIL), which controls 33% of the Mercedes F1 team.
This effectively gave Kurtz a 5% interest in the Mercedes team, even though his deal is not directly with the outfit.
When it comes to the future, Wolff seems very happy with his lot.
From Mercedes’ perspective though, an expansion in its stakeholding in F1 has its advantages - especially because the possibility of acquiring a shareholding in Alpine would give it a firmer footing in one of its customer teams.
It would give some added financial bite to such a partnership, especially considering supplying customer engines is not much of a profit driver in F1 thanks to the hard price limits laid down in the regulations.
The Race understands that any talk of a Mercedes deal with Alpine being the start of a push for Alpine to become a junior or sister team to the works squad is wide of the mark though.
The idea being evaluated, which is certainly far from done, is one of a pure financial arrangement.
A partnership on these terms also needs to be put in the context of Mercedes being known to be eager to cut back on the number of customers it supplies in F1.
Right now, and until the end of the current rules cycle whenever that is, Mercedes is supplying four teams in total – itself, McLaren, Williams and Alpine.
Ideally, and as Wolff told the F1 channel at the end of last year, the idea is to reduce this for whenever the next contracts come up for discussion.
Wolff said that the optimum number would be “between two and three, I guess” which would mean dropping one of the current partners.
A buy-in at Alpine would mean that the Renault-owned squad would then have a more solid link to Mercedes, which would then make it logical for a customer partnership to continue.
Were it to come off, it could then leave the battle for a final Mercedes customer unit to be between Williams and McLaren.
Negotiations ongoing
As part of the original Otro deal, it is understood that any sale of its stake in the team before September this year needs to be approved by Alpine’s Renault owners.
That is why talks with all the interested parties in the Otro stake have involved Renault CEO Francois Provost – with Alpine executive advisor Flavio Briatore fully aware of what is taking place.
Speaking at the Chinese Grand Prix, Briatore emphasised that the talks right now involved Mercedes – but they were not the only ones still in the running.
“It's the negotiation from Mercedes. Not with Toto,” he said. “With Mercedes. We see. In this moment we have three or four potential buyers.”
The continued interest from multiple parties, with Renault having a veto on any sale for now, means that the final outcome is far from certain at the moment.
And Mercedes sources have insisted that, while its evaluation of the situation is serious, it remains just that: something it is considering rather than something that it is pushing for and will definitely happen.
