Liberty Media Set to Acquire Racing League Formula 1

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Liberty Media Group (NASDAQ:LMCA) is purchasing Formula 1, one of the premier racing leagues in the world.

Liberty MediaThe company then plans on changing its name to Formula 1 Group. The deal is worth an estimated $4.4 billion in cash, stock and debt once the acquisition is complete.

Immediately, Liberty Media will own an 18.7% stake of Formula 1, while the league’s largest shareholder — CVC Capital Partners Limited — will own 65% of Liberty Media Group. The chairman of Formula 1 will be Chase Carey, executive vice president of 21st Century Fox.

The deal will cost the company $1.1 billion in cash, $138 million in LMCA shares, as well as $351 million of an exchangeable debt situation that will be overtaken by the company from Formula 1, and converted into Liberty Media shares. The deal will likely close in the first quarter of 2017.

Liberty Media will also assume $4.1 billion of the racing league’s current debt.

Formula One consists of racing vehicles that only have one car seat, and it consists of a series of events known as Grand Prix (French for grand prize). The races take place in tracks and streets specifically designed for the sport.

The Monaco Grand Prix is perhaps the highest honor one could win in the event, which Ayrton Senna of Brazil won five times, while Michael Schumacher of Germany and Graham Hill of Great Britain each won it five times.

Liberty Media owns a number of media subsidiaries as well as entertainment businesses, including the Atlanta Braves from Major League Baseball, as well as the team’s stadium.

LMCA stock is down 0.1% Wednesday.

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Article printed from InvestorPlace Media, https://investorplace.com/2016/09/liberty-media-formula-1-cvc-lmca/.

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