AUGUST 17, 2023

Alpine buyout could be Andretti's solution

Selling the chassis side of its Formula 1 operation could be on the cards for Alpine, with Andretti Global being the most obvious candidate to take over the Enstone factory, personnel and race team, a few observers admitted during the recent Belgian Grand Prix.

By Luis Vasconcelos
The unexpected and important exodus of top management personnel from Alpine's Formula 1 team could be the sign the French manufacturer has grown disenchanted with Grand Prix racing and is trying to find a way out of the very expensive investment made in the last couple of years. With cars sale worldwide not even reaching 2.000 per month: June was the company's best month as 1863 cars were sold, the French manufacturer has a mountain to climb to start its road to profitability and having a Formula 1 team that struggles to get in the top ten in qualifying and the races and costs a lot of money to run may not be helping the process.
The promotions of Bruno Famin to the role of interim Team Principal and Julian Rouse to the position of interim Sporting Director, replacing Otmar Szafnauer and Alan Permane, respectively, after both were dismissed during the Spa-Francorchamps weekend, indicates the decision taken by Renault Group CEO Luca di Meo was so sudden, he had no time to find the most suitable candidates for the job and had to promote internally.
There are, however, those who believe di Meo has become alarmed with the amount of money the French Group has been investing in the Alpine brand with little or no return and, very much on the lines of his late mentor Sergio Marchionne, has decided to cut his losses as soon as possible, got rid of two high profile but also expensive people and is now looking for a way to keep the Viry-Chatillon engine operation in Formula 1, while selling the Enstone base.
Given Alpine is set to supply Power Units and other mechanical elements to Andretti Global, should the American company finally get the Formula 1 entry that it has been seeking for the last couple of years, the way to combine their common interests would be to hand over the chassis side of Alpine's operation to Michael Andretti and his partners and operate in the same way the team did when Genii capital bought it from Renault at the end of 2009, handing over the control of the team and the running of the Enstone factory to the new owners, but keeping the engine department in French hands, to maintain a presence in Formula 1 that is always useful for the development of technology that can be applied in the car industry.
With the FIA taking its time to announce which applicants to a slot in Formula 1 are getting the nod for 2026: Andretti and Hitech are the most talked about names but at least eight candidatures reached the Federation, according to internal sources: and with Formula 1 siding with the ten existing teams and being unwilling to do a commercial deal with any new entrants: effectively frustrating their bids: acquiring the majority of the shares in Alpine's Formula 1 team could be the way in for Andretti, while giving di Meo an exit strategy he may be seeking right now.
It's worth noting that recently an American conglomerate acquired 20 per cent of Alpine's Formula 1 operation, with actors Ryan Reynolds and Rob McElhenney being part of that group, which also included private equity firm RedBird Capital Partners and Otro Capital, for a total investment of 218 million USD. While that sale valued the team in 900 million USD, recently Forbes valued the French team in 1,4 billion USD, so to take over control of 51 per cent of the shares of Alpine F1 Team, Andretti would have to pay around 700 million USD or, alternative, pay 420 million USD and join forces with the group that recently purchased 20 per cent of the team's stake.
A sale would be the ideal solution for both sides, would completely bypass Formula 1 and the existing team's attempt to block Andretti's entry to the sport, so the next few weeks will be crucial to see which way the Americans are going to go, as their future moves are fully dependent on what the FIA will decide regarding new entries in the next couple of weeks.