Honda website
Honda website

JANUARY 19, 2001

Mercedes rumors

THERE has been speculation in recent days in The Sunday Times in London that a number of car companies will bid for Mercedes-Benz if Jurgen Schrempp, the chairman of the German automobile firm's parent company DaimlerChrysler, is ousted. Schrempp is under pressure because of the poor performance of the company's share price and because of legal challenges to takeover of Chrysler. According to the newspaper Deutsche Bank and the Kuwait Investment Office, which between them control almost 20% of DaimlerChrysler, have given Schrempp six months to sort out the current problems and if he fails to do so they will force him out.

If that happens the newspaper speculates, DaimlerChrysler may be broken up and there are several car companies which would be bidding for the profitable Mercedes-Benz unit. Both Ford and General Motors are obvious bidders but the two US companies would have serious trouble with regulatory bodies and it is more likely that a smaller company such as Honda might make a more successful bid. The price would be in the region of $45bn.

It is unlikely that all this will actually happen but if it did it would have a dramatic effect on Formula 1 as Honda currently supplies British American Racing and Jordan and would be unlikely to want to continue with three teams, having acquired the engine supply of McLaren as well. As McLaren is the most successful of the three teams it is more likely that one of the others would be dropped and with BAR's Honda contract up at the end of the 2001 season it would be the obvious candidate.

However, a lot has got to happen before that comes to pass...