Freshfields leads on £3.5bn McLaren buyout by Middle East wealth funds

Freshfields, Morgan Lewis and Hogan Lovells have advised on a deal that hands full ownership of McLaren Racing - the home of McLaren’s Formula 1 team - to Gulf investors Mumtalakat and CYVN.

The transaction sees parent company McLaren Group - owned by Mumtalakat, Bahrain’s sovereign wealth fund, and Abu Dhabi government-owned CYVN - buy out the remaining minority stake in McLaren Racing from US investors including New York-based MSP Sports Capital, global private capital giant Ares and private credit firm O’Connor Capital Solutions.

Behind the deal

The deal, which closed last week, involved the transfer of 30% of McLaren Racing, in a transaction reportedly valuing the Formula 1 team’s owner at around £3.5 billion. That’s more than six times the valuation it achieved in 2020 when MSP bought its 33% stake in the business for £185 million.

It means McLaren Racing - which also contains McLaren’s IndyCar and World Endurance Championship entries - will now be fully controlled by Mumtalakat and CYVN. The Bahraini fund remains majority shareholder, with CYVN owning a minority stake.

CYVN first got involved earlier this year, when it enlisted A&O Shearman on its purchase of McLaren Automotive - its sportscar division - and a non-controlling stake in McLaren Racing from Freshfields-advised Mumtalakat.

Advising

Freshfields advised McLaren and Bahrain’s Mumtalakat.

The team was led by partners Rhys Evans (London) and Damien Zoubek (New York), who has secured a string of major mandates for Freshfields since jumping from Cravath in 2021. They were assisted by antitrust partner Tom McGrath (London/Brussels) and tax partner Paul Davison (London).

Morgan Lewis advised MSP Sports Capital, with a team including Mark Geday (London, corporate), Richard Aldridge (Philadelphia, corporate), Daniel Losk (Boston, funds), Paul Denham (London, finance), and Leo Theodosiou (London, antitrust).

Hogan Lovells acted for O’Connor Capital Solutions, led by partner Michael Kuh (New York, private equity) and counsel Steven Palyca (New York, M&A). Also advising were partners Anthony Doolittle (London, M&A), Russell Hedman (Denver, M&A), Angus Coulter (London, competition).