Mercedes Backs Away from Alpine Deal Over Valuation Concerns

The Breakdown of Negotiations

Mercedes, the iconic name in Formula 1, recently stepped back from discussions to buy a 24% share in the Alpine team, leaving many fans and industry experts puzzled.

According to sources close to the negotiations, the crux of the decision lay in Mercedes' assessment that the valuation of $720 million proposed by Otro Capital was far too high. This figure positions Alpine's total worth at an astonishing $3 billion, a valuation that ignited skepticism within the renowned team.

"We understand that discussions have stopped," stated a source at Renault, reflecting the sudden halt in a deal that many believed was on the verge of completion.

Understanding the Valuation Disparity

The deal was to see Mercedes acquire a stake held by Otro Capital, who had purchased it for approximately €200 million (£171 million) in June 2023. This drastic increase in valuation raises several questions about the market dynamics currently at play within F1.

Mercedes executives believe the fair market value for Alpine to be between $2.2-2.4 billion (£1.6-1.8 billion), particularly given the team's recent performance.

Comparative Valuation in F1

It's important to contextualize Alpine's situation. For instance, both Mercedes and McLaren were previously valued at £4.6 billion and £3.5 billion, respectively—figures that are bolstered by their consistent profitability and strong competitive standings in the sport. In stark contrast, Alpine currently ranks fifth in the constructors' championship, having had a lackluster finish in 2025.

Who Else Was Interested?

The race for minority stakes in F1 teams isn't limited to Mercedes. Previous interests in Otro's share have been expressed by a group linked to Christian Horner, the former Red Bull team principal, alongside various private equity firms. However, Renault holds power of veto over any sale of the Otro shares until September, a strategic position that limits further negotiations significantly.

In the words of analysts, “Negotiation dynamics in F1 are as intricate as the racing strategies on the track. The valuation disagreements are just the tip of the iceberg.”

The Future of Mercedes and Alpine

Mercedes' decision to pull out reflects broader strategies in Formula 1 as they contemplate reducing the number of customer teams to two by 2031. Currently, they supply engines to McLaren, Williams, and Alpine, but shifting dynamics may mean that one team needs to seek a new supplier in the near future.

As Mercedes re-evaluates its customer strategy, it raises significant questions about whom they see fitting their long-term vision amid changing engine regulations and competitive landscapes. Renault's decision to dismiss further negotiations with Alpine stakeholders only compounds the uncertainty moving forward.

Recent Sponsorship Success

Despite the tumult in ownership discussions, Alpine recently secured a significant sponsorship deal with luxury brand Gucci. This collaboration is a major win for Alpine, facilitated by Flavio Briatore, and speaks volumes about the brand's potential in attracting high-profile partnerships.

As the landscape of F1 ownership shifts and transforms, it will be fascinating to see how these developments unfold, shaping the future of some of the sport's most notable teams.