Mercedes Withdraws from Alpine Buy-In Talks

Mercedes withdrew from discussions to acquire a minority stake in the Alpine Formula 1 team, citing an inflated price. The German automotive company and its F1 director, Toto Wolff, had reached a preliminary agreement with Alpine's owners, Renault, to purchase a 24% stake owned by the investment firm Otro Capital. However, Otro demanded a price that Mercedes deemed excessive, leading to the negotiations' collapse.

Sources indicated that Otro sought $720 million (£536 million) for its share, valuing Alpine at $3 billion (£2.2 billion). Otro had originally acquired its stake for 200 million euros (£171 million) in June 2023. A Renault source confirmed, "We understand that discussions have stopped."

Mercedes reportedly considered a valuation between $2.2 billion and $2.4 billion (£1.6 billion to £1.8 billion) to be reasonable for Alpine, based upon typical valuation methods that emphasize revenue multiples, particularly for loss-making companies like Alpine. In contrast, recent valuations of other F1 teams placed Mercedes at £4.6 billion and McLaren at £3.5 billion, reflecting their profitability and success compared to Alpine, which stood fifth in the constructors' championship after five races in the current season, having ranked last in 2025.

Interest in purchasing the Otro stake also included investors linked to former Red Bull team principal Christian Horner and various private equity firms. However, Renault reportedly opted against pursuing any further negotiations. With the power to veto any sale of the Otro shares through September, Renault would have likely blocked any transfer to groups associated with Horner.

Additionally, Alpine recently secured a significant title sponsorship with the luxury brand Gucci, facilitated by executive adviser Flavio Briatore through connections with Luca de Meo, the former CEO of Renault who now leads Gucci's parent company, Kering.

Mercedes' interest in acquiring a stake in Alpine was driven by a vision for a long-term engine supply relationship, benefiting from economies of scale that might arise. However, Mercedes is planning to reduce its customer teams in F1 to two by the implementation of new engine regulations, set to take effect no later than 2031. Currently, Mercedes supplies engines to McLaren, Williams, and Alpine, with one of these teams needing a new supply if the reduction proceeds. Williams is the longest-standing customer, followed by McLaren, while Alpine just initiated its Mercedes engine supply this year.