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John Malone’s Liberty Media Buys Formula One Motor Racing for $4.4 Billion

Chase Carey named chairman of Formula One

Liberty Media has agreed to acquire global motorsports business Formula One from a consortium of sellers led by CVC Capital Partners for $4.4 billion, the companies announced Wednesday.

Liberty Media, which is controlled by chairman John Malone, will own Formula One after the completion of the transaction, expected by the first quarter of 2017. At that point, the Liberty Media Group will be renamed the Formula One Group. The consortium of sellers led by CVC will own about 65% of the Formula One Group’s equity and will have board representation at Formula One. In addition, a CVC representative will join the Liberty Media board.

The deal terms give Formula One an enterprise value of $8 billion, according to the companies.

Chase Carey, executive vice-chairman of 21st Century Fox and Rupert Murdoch’s longstanding lieutenant, 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, the 85-year-old Brit who has headed F1 for the past four decades, will remain CEO for the time being.

“We are excited to become part of Formula One,” Greg Maffei, president and CEO of Liberty Media, said in a statement. “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.”

Carey, in a statement, added, “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.”

With the signing of the acquisition agreement, Liberty Media has already acquired an 18.7% minority stake in Formula One for $746 million in cash. The rest of the deal will be funded with $1.1 billion in cash, 138 million newly issued shares of Liberty Media stock and $351 million in debt to be issued by Formula One (and exchangeable into shares of Liberty Media). Liberty Media will assume Formula One’s $4.1 billion of existing debt and $700 million in cash.

Donald Mackenzie, co-chairman of CVC, commented: “We are delighted Chase Carey is joining Formula One as its new chairman and that he will be working alongside Bernie Ecclestone. Chase’s experience and knowledge of sport, media and entertainment is as good as it gets and we are very pleased to secure his services. Bernie has been a wonderful CEO for us over the last 10 years. There have been many successes and the occasional challenge but there has never been a dull moment and we have had a lot of fun. The combined skills of Chase and Bernie mean that the successes should continue and we wish them well.”

Liberty Media said Formula One teams will be given the opportunity to investment in the business. The deal is subject to regulatory approvals in various countries, as well as the approval of the Fédération Internationale de l’Automobile — the governing body of Formula One — and Liberty Media’s stockholders.

Malone’s Liberty Media also owns the Atlanta Braves, a 53% stake in SiriusXM Group, and assets pooled in the Liberty Media Group (which includes its interests in Live Nation Entertainment and Formula One, and minority equity investments in Time Warner and Viacom).

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