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Aston Martin’s proposal to sell its shares in the Formula 1 team that bears its name is, on the surface, quite dramatic.
It signals a misleading message of ‘manufacturer wants out of F1 team ownership’, especially as Aston Martin Lagonda intends to sell its entire shareholding rather than simply divest some of it.
That is different to, say, Daimler diluting its share of the Mercedes F1 team or Renault selling part of Alpine to US investors.
However, the Aston Martin F1 team does not exist in quite the same way as those examples. Aston Martin was never the majority shareholder. This has never been Aston Martin’s team.
It has only held a minority investment since November 2023 (presumably quietly restructured around the time that US investment company Arctos Partners bought a minority shareholding) and is entitled to more in a second wave of shares totalling a value of around £74million. That's likely only in the sub-10% region in total based on what the team's valued at overall.
All that is to say Aston Martin Lagonda is effectively a glorified title partner - for which the team received just under £20m last year - of a specialist organisation headed by Lawrence Stroll, who just so happens to also head up Aston Martin Lagonda.
Stroll and his consortium represent the common link between the two entities. When he led the purchase of Force India’s assets and assumed its F1 entry, it was done under the Racing Point name. That still exists in a web of UK company registrations that “AMR GP” is housed within.
Stroll turned the F1 team into Aston Martin once he took control of the car company. Aston Martin has influence from a commercial marketing perspective, and has held its minor shareholding, but it has not controlled the team, it has not influenced car design, it does not build the engine, and so on.
Now it is seemingly looking to cash in on the value of that shareholding (and the future shares it is entitled to, the "secondary warrants") as part of the wider battle the company has faced for several years.
"Benefiting from the growing success and popularity of Formula 1, alongside this long-term sponsorship agreement, the group now proposes to sell its existing shares and the shares issuable on exercise of its secondary warrants, with a view to realising a premium to the circa £74million combined book value of these investments," the Aston Martin Lagonda proposal reads.
"As at 31 December 2024, the book value of the shares was £50.9million. The group has also held discussions with AMR GP regarding the company exercising the secondary warrants earlier than 2031, as is currently permitted, such that the shares issuable on exercise could be included in the proposed sales process.
"As at 31 December 2024 these shares had a book value of £23.2million."
But there is no suggestion that it will impact the long-term sponsorship agreement with the F1 team, which should run for another five years commencing in 2026, and no indication that plan will change - at least while the common ownership of the two Aston-branded entities remains.
Aston Martin released a statement later on Monday with further details of the sale, which will result in Stroll's shareholding in Aston Martin Lagonda increasing to 33%.
Stroll said in Monday's statement that Aston Martin had recommitted to its long-term sponsorship and licensing agreement, which he said will keep the Aston brand in F1 "for decades to come".
What is unclear is where the shares will go. The buyer of Aston Martin's F1 shares is to be determined, with investment bank Raine Group commissioned to facilitate that.
Aramco previously had a right to a 10% shareholding in the F1 team under its own sponsorship agreement, for example, so one solution could be the Saudi Arabian company finally parlays its interest into minority team ownership.
Another route could be to find a different minority investor, like with the US investment organisation that bought a significant but minority stake in the team about 18 months ago.
Ultimately, little should change in terms of the direction of the team and the ownership. The Aston Martin brand has been tapped into because of the massive potential the arrangement has for the team, for F1, and for the car company.
Success obviously hasn't materialised just yet, but what we know as the Aston Martin F1 team has been built for the long-term. And though it is unfortunate to call upon a horrible word overly used in the corporate world, there is clear synergy between Aston Martin’s car company and F1 team - at least from a marketing and commercial perspective.
The team is almost inextricably linked to the manufacturer with or without a shareholding.
And though a sale of a minor shareholding might be perceived as the first step towards disentangling the two - and would certainly simplify any change in the long-term - it is hard to see the team's future being anything other than as Aston Martin, at least in the medium-term.
Aston Martin's statement in full
Today's news underscores our Executive Chairman Lawrence Stroll's long-term and unwavering commitment to both Aston Martin and the current Formula 1 team. A long-term contract is now in place to ensure the Aston Martin name remains at the pinnacle of motorsport for decades to come.
The proposed transactions, which will see Aston Martin Lagonda (AML) sell its stake in the Aston Martin Aramco Formula One Team (AMF1), will result in Mr Stroll increasing his shareholding in AML to 33% while strengthening the company's balance sheet by over £125m.
Mr Stroll has commissioned the investment bank Raine Group to help find a buyer for AML's stake in the Formula 1 team. Raine will work closely with AMF1's commercial chief Jeff Slack to secure a strategic investor who can add long-term value to the team and the brand.
Mr Stroll said: "These moves demonstrate that Aston Martin's place on the Formula 1 grid is as secure as ever. AML recently recommitted to its long-term sponsorship and licensing agreement with AMF1, confirming that the legendary Aston Martin brand and its British racing green colours will compete in Formula 1 for decades to come."
