McLaren Group lines up heavyweight Walsh as chairman | Business News



The owner of the McLaren Formula One (F1) team is close to naming Paul Walsh, the heavyweight businessman, as its next chairman.

Sky News can reveal that Mr Walsh, a former chief executive of the Guinness-owner Diageo, is in advanced talks about chairing McLaren Group, which also includes the brand’s road-car and applied technology operations.

Sources said the Woking-based company could announce his appointment as early as Wednesday.

Mr Walsh, who is to step down as chairman of the FTSE 100 catering group Compass later this year, will replace Shaikh Mohammed Bin Essa Al Khalifa in the McLaren chairman’s seat.

The arrival of a prominent City figure is likely to stoke speculation that McLaren’s principally Bahrain-based shareholders will eventually consider taking the company public.

However, insiders said on Tuesday that there were no firm plans for an initial public offering (IPO), and that such a move was unlikely to take place before 2023.

If it does happen, McLaren’s investors are likely to pursue a valuation of well over £2bn.

McLaren is majority-owned by Mumtalakat, the Gulf state’s sovereign wealth fund, with smaller shareholders including Mansour Ojjeh, a Saudi Arabian-born businessman.

Mr Walsh’s expected appointment will come four days before the first grand prix of the 2020 F1 season in Melbourne, Australia.

The sport is grappling with the implications of the global COVID-19 outbreak, and has announced that this month’s race in Bahrain will be staged behind closed doors.

Nevertheless, McLaren is confident of building on its improved F1 performance in 2019, when it finished fourth in the constructors’ championship behind Mercedes, Ferrari and Red Bull Racing.

Its driver line-up this year comprises Carlos Sainz and Lando Norris.

McLaren’s on-track operations, which are headed by Zak Brown and include its participation in the Indianapolis 500 race, account for roughly 20% of the group’s annual revenues.

It has recently struck sponsorship deals with companies including Darktrace, the cybersecurity software provider, and upgraded British American Tobacco to a “principal partnership” – despite the ban on tobacco advertising in the sport.

McLaren’s road-car division, which was previously a semi-independent company called McLaren Automotive, makes some of the world’s most expensive cars, with models including the Senna – named after its legendary former F1 driver, Ayrton Senna.

The unit, which is run by Mike Flewitt, represents the majority of the group’s sales.

In its latest results, McLaren Group said demand in North America and Asia Pacific had remained strong, although volumes are expected to have been severely impacted by the spread of COVID-19.

The company added that its year-to-date sales for the first nine months of its financial year had reached more than £1bn, up 19% on the previous year.

It produced more than 3,700 cars during the period.

McLaren is due to report full-year results next month.

The British company saw its separate divisions reunited following the departure in 2017 of Ron Dennis, the veteran McLaren boss who had steered its F1 team through the most successful period in its history.

He became one of Britain’s best-known businessmen, expanding McLaren’s technology ventures into a wide range of other industries through lucrative commercial partnerships.

Mr Dennis offloaded his stake in a £275m deal following a bitter dispute with fellow shareholders.

He had presented to McLaren’s board a £1.65bn takeover bid from a consortium of Chinese investors, but did not attract support for it from boardroom colleagues.

Both McLaren and Mr Walsh declined to comment on Tuesday evening.



Sky News

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