America’s Liberty Media has initiated its purchase of Formula 1 in a deal that values the global motor racing series at $8 billion.
The company has bought an 18.7% stake in Formula 1 in first of a multi-step buyout. Once the entire acquisition process is complete, Liberty Media will own a 35% stake in the sport, with the remainder to be owned by a consortium of investors led by CVC Capital Partners, F1's current majority stakeholders.
The deal leaves Formula 1 with an enterprise value of $8 billion and an equity value of $4.4 billion. Liberty Media also assumes Formula 1’s $4.4 billion debt and $ 0.7 billion of cash reserves.
Following the initial acquisition, Fox Sports founder Chase Carey has been appointed as the Chairman of the Formula 1 Group, with Bernie Ecclestone retaining his post of CEO.
Speaking at the announcement, Crey said: "I am thrilled to take up the role of Chairman of Formula One and have the opportunity to work alongside Bernie Ecclestone, CVC, and the Liberty Media team. I greatly admire Formula One as a unique global sports entertainment franchise attracting hundreds of millions of fans each season from all around the world. I see great opportunity to help Formula One continue to develop and prosper for the benefit of the sport, fans, teams and investors alike."
Ecclestone added: "I would like to welcome Liberty Media and Chase Carey to Formula One and I look forward to working with them."
The total acquisition amount will be paid in cash, shares and a $351 million exchangeable debt instrument.
Once the deal is complete, Liberty Media Group will be renamed as the Formula One Group, with a corresponding change in the New York Stock Exchange to FWON.
by Rachit Thukral