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Apple ‘in £1.5bn talks to buy supercar maker McLaren’ www.theguardian.com
Apple has been linked with a shock £1.5bn deal to buy McLaren Technology Group, the Formula One team owner and supercar maker.
A deal between Apple and the British company would dramatically shake up the technology and automotive industries. The California-based company’s interest in McLaren Technology Group highlights its ambition to develop technology that could be used in an electric and driverless car.
Apple has approached McLaren about a takeover but could also make a strategic investment in the company, the Financial Times reported.
McLaren denied that it was in talks with Apple, but it said: “As you would expect, the nature of our business means we regularly have confidential conversations with a wide range of parties, and they need to remain so.
Apple said it “does not comment on rumours or speculation”.
McLaren builds supercars such as the P1, which costs £866,000 and includes ground-breaking technology such as a lightweight electric motor, carbon fibre body panel, and on-board computer systems. The company is also developing a range of technologies for use in healthcare, energy and transport.
Ron Dennis, the chair and chief executive, has expanded the company dramatically from its origins in Formula One, where it is one of the most successful teams in the history of the sport despite struggling in recent seasons. The company is based in Woking, Surrey, in a futuristic headquarters designed by Norman Foster.
Dennis would be in line for a multimillion-pound windfall if a deal with Apple goes through. He owns 25% of McLaren Technology Group while Tag Group, a Luxembourg-based holding company led by Mansour Ojjeh, owns another 25% and Bahrain’s sovereign wealth fund Bahrain Mumtalakat holds the other half of the business.
McLaren Technology Group’s last financial results show the company recorded sales of £266m in 2014 and a pre-tax loss of £23m. It produces roughly 1,500 cars a year but has pledged to spend £1bn on research and development over the next six years.
Analysts said a move for McLaren would make sense for Apple. Neil Campling, analyst at Northern Trust Capital Markets, said it would provide Apple with “instant credibility” in the automotive industry and that the companies had “an unusual level of compatibility in design and business outlook”.
He added: “The attractiveness of McLaren – the designer of very high-end automotive products on and off the race track – to Apple, with its own reputation for design-centricity and technological expertise, is quite obvious. McLaren’s tagline could almost be Apple’s – ‘Designed and Engineered to Win’.
“Apple has the balance sheet to do it – they could do the deal for only a fortnight’s free cash flow – and there are logical commonalities in business model. Perhaps the real jewel in McLaren’s crown from Apple’s perspective is its applied technologies business, the [research and development] lab born from their Formula One expertise.
“If, as has been rumoured for some time, Apple is serious about the autonomous vehicle market, buying McLaren gives them instant credibility in the sector and brings with it an unusual level of compatibility in design and business outlook. It won’t shift the Apple dial much on its own so we read it as a statement of intent regarding autonomous vehicles.”
Apple rarely makes acquisitions, and a takeover of McLaren would be its biggest deal since it bought the Beats headphone brand for $3bn (£2.3bn) in 2014.
The US company is understood to have been developing a driverless car in a secretive project codenamed Project Titan. However, a number of workers have left the initiative in recent months, leading to speculation that Apple is struggling with its design or director.
Tim Cook, the chief executive of Apple, has never publicly acknowledged the project.
Kelley Blue Book, the US automotive research group, said McLaren’s cars were popular in Silicon Valley. Phil Schiller, senior vice president for worldwide marketing at Apple, owns a McLaren.
Michael Harley, analyst at Kelley Blue Book, said: “Apple’s potential acquisition of McLaren isn’t nearly as far-fetched as its initially sounds. Apple has been rumoured, but never officially confirmed, to be working on an electric car. McLaren is well-known as a manufacturer of high-performance sports and racing cars, but its true expertise is in engineering lightweight materials such as carbon fibre and aluminum, both of which are key building blocks to designing an innovative lightweight vehicle.
“Combine McLaren’s many proprietary patents with its proficiency in race technology, hi-tech medical devices, and research, and the two do appear to be a perfect match for each other.”
Published Date:2016-09-22
