British motor-racing executive Ron Dennis has ended his 37-year association with McLaren, the automaker and Formula One team, after agreeing to sell his stake for £275 million.
Mr Dennis has agreed to sell his shareholdings in McLaren Technology Group, which runs the F1 outfit, and McLaren Automotive Limited, the supercar maker. Mr Dennis previously led both groups in different roles.
The deal will allow the other existing shareholders, TAG, the Luxembourg investment group run by entrepreneur Mansour Ojjeh, and Mumtalakat, Bahrain's sovereign wealth fund, to bring the two entities under a single holding company called McLaren Group.
The company said the deal values the newly formed organisation at £2.4 billion, making it one of the most valuable private companies in the UK. Two people close to the group’s leadership said that Mr Dennis made £275m from the transaction.
“Well funded to succeed and grow, and led by an ambitious management team, McLaren is ideally poised to build on the successes that I am so proud to have contributed to during my time leading such a great British group of companies,” said Mr Dennis.
Despite the conciliatory statement, the British executive’s departure from McLaren has been acrimonious. Last November, Mr Dennis was ousted from his positions as chairman and chief executive of the technology arm and placed on gardening leave following disagreements with his fellow shareholders. He remained chairman of the automotive group.
At the time, Mr Dennis said he was “disappointed” with the decision, “despite the strong warnings from the rest of the management team about the potential consequences of their actions on the business”.
Later that same month, McLaren hired Zak Brown as executive director of McLaren Technology group, putting the American marketing executive in charge of the F1 team. The move effectively ended Mr Dennis's illustrious racing career.
Mr Dennis rose from being an F1 mechanic in the 1960s to owning smaller racing teams, before taking over McLaren in 1981. He embarked on a winning streak with the team claiming 158 Grands Prix victories and seven World constructors’ championships.
He stepped back in 2009 to help launch the supercar business as a standalone company but was reinstated as chief executive of McLaren Technology in 2014 amid falling performances on the race circuits.
Under its previous structure, McLaren Technology Group was financially separate from McLaren Automotive, a supercar maker founded seven years ago, while sharing many of the same shareholders.
Mumtalakat owned 50 per cent of McLaren Technology Group, while TAG owned 25 per cent and Mr Dennis owned 25 per cent.
Mumtalakat held 55 per cent of the Automotive company, while TAG owned 11 per cent and Mr Dennis 10 per cent, while there were a number of other small private shareholders.
The new McLaren Group has not revealed its ownership structure, but a person briefed on the deal said that Mumtalakat is the new majority shareholder.
Sheikh Mohammed bin Essa Al Khalifa, an adviser to Bahrain’s crown prince, will become McLaren group’s new executive chairman. He said: “There will be time in the near future to outline our plans, for the coming months and years will be an extremely exciting time in the story of McLaren.”
- (Copyright The Financial Times Limited 2017)