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Williams and Marussia were in merger talks confirms Wolff

NEWS STORY
05/12/2013

In recent weeks rumours have been doing the rounds that Marussia had been in talks with Williams and Sauber about merging their operations. It wasn't the first time that this kind of story had broken cover as Marussia and Caterham were known to have been in talks about merging earlier this year. Since then Marussia has leapfrogged Caterham and finished in tenth place this season so you would have thought that mergers would no longer be on its mind. Not so it seems.

Mercedes' executive director Toto Wolff has revealed to Pitpass' business editor Christian Sylt that talks have indeed taken place about merging Marussia and Williams. However, in an article for the American sports service ESPN Sylt quoted Wolff saying that the talks are "getting nowhere" as they would lead to the closure of Marussia.

What has Wolff got to do with the merger of Marussia and Williams you might ask. The reason he is at the centre of the discussions is that he owns a 12.2% stake in Williams. The team is floated on the Frankfurt stock exchange and has a market value of £150m meaning that Wolff's stake is worth £18m.

He has owned shares in Williams since 2009 when he became a director of the team. In January this year he jumped ship to Mercedes and took a 30% stake in that too. Soon afterwards he announced that he would sell his Williams shares to avoid any conflicts of interest. Wolff says there is good reason why Marussia owner Andrey Cheglakov would be interested in buying them.

"One of the discussions we had was with Marussia. They discussed it with Sauber as well. You have a high profile, wealthy individual who funds the team with 50, 60 or 70 million a year, similar to Tony Fernandes, but, performance-wise, is not getting anywhere. Then you have a team which is self-funded where you could buy a substantial minority stake, 5% maybe or more and you could go on to the board. At the same time, instead of paying 50, 60, 70 million a year, you pay 20 or 30 and you promote your own brand. It would close Marussia, it would close Caterham or whatever. That's why those discussions are getting nowhere."

Although Marussia finished 2013 one spot higher than last year it has not scored a point since joining F1 in 2010. In 2012 it burned up a £59m net loss which widened by 27.4% on the previous year. This was driven by an 8.7% increase in costs to £76.1m whilst revenue only rose by 2.9% to £29.4m.

This year Williams had one of the worst seasons in its 36-year history as it finished ninth with five points. It came on the back of the team burning up a £4.6m net loss last year and the bad news continued after the end of this season as it lost Pastor Maldonado who brings an estimated $45m to the team through sponsorship from Venezuelan state oil company PDVSA.

Wolff says that he "would never do anything against the interests of Frank [Williams]" and he adds "I need to find the right partner. I need to have somebody who is not only buying those shares but somebody who is buying for the family and who is potentially a sponsor or brings some added value to Williams."

He says "the difficulty is that you don't want to find somebody who is just pouring money into it... it's a catch because you need to find somebody who feels that it is an investment but at the same time hopefully has a brand which he wants to promote. If you find that kind of person then it makes sense."

Despite Williams' recent woes, Wolff says that it is still in good shape. "Williams was always healthy and even though, let's say, profits have somehow flat-lined, it is still a company that has generated positive cashflows in the last few years also because they are a diversified business. The advanced engineering division was very profitable last year and it has very little debt, almost none. They are building a very big building for advanced engineering to develop road cars. They are very solid and very transparent."

Wolff says he hopes to sell around two-thirds of his Williams shares and adds "I do not have a deadline. It is absolutely flexible. The intention is to sell them over a reasonable period of time." It remains to be seen who will be the chosen one.

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1. Posted by Paul C, 06/12/2013 3:03

"Marussia and Caterham should watch "The Producers" to figure out a way to fix their finances."

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