Thursday February 3rd, 2000

By Timothy Collings

DaimlerChrysler said today it had taken up its option to buy 40 percent of the McLaren Formula One grand prix team.

The two companies have worked together since 1995 and McLaren's Mika Hakkinen has won the world drivers' title for the past two seasons in a car powered by a Mercedes-Benz engine.

The option was agreed in July last year. "It has been agreed that the purchase price for the shares will be kept confidential," DaimlerChrysler said in a statement.

McLaren's chief executive Ron Dennis confirmed the deal at the launch of the team's 2000 car at the Spanish racing circuit of Jerez.

"This is a milestone for the group because the equity participation from Daimler Chrysler will give us a great deal more strength and encourage much closer cooperation between the two companies," he said.

Dennis and TAG Group SA, who will continue to be in charge of operational management, each retain 30 percent stakes.

"The investment in TAG McLaren is the result of our increasingly close and mutually beneficial cooperation in Formula One and other areas," said DaimlerChrysler board member Juergen Hubbert.

"It forms a part of DaimlerChrysler's long-term strategy of maintaining Mercedez-Benz's leadership in engineering performance, technological edge and brand image in the face of increasingly stiff competition."

McLaren won the constructors' championship in 1998 but lost out to Ferrari last season. McLaren has won eight constructors' world titles and a record 11 drivers' titles.

The two companies are developing a Mercedes-McLaren SLR sports car, to be rolled out in 2003 as a rival to the top flight Ferraris. The new car will succeed the McLaren F1 which was launched in 1992 with a BMW engine.

McLaren was set up in 1963 by New Zealand racing driver Bruce McLaren who won the U.S. Grand Prix aged 22. The McLaren team won its first grand prix in 1968, driven by Bruce McLaren, but he was killed in a testing accident in 1970.

A buyout in 1980 led to Dennis taking over.