To be honest, it seems like a rather odd potential arrangement for both parties. I'm interested in the direction of the approach. Did McLaren approach Apple or Apple McLaren? Given their relative size, etc... I imagine this being Apple approaching McLaren.
Typically, when a larger company approaches a much smaller one with serious intent, the only question left is price. Given their relative size, price seems largely irrelevant.
Time to speculate.
Why might Apple be interested:
- They have a car project of sorts - for what purpose, not directly expressed at this stage.
- They have been hiring people from automotive companies in advance of making their intentions public.
- possessing a strong and recognisable brand and heritage;
- full of highly skilled individuals;
- possessed of advanced manufacturing methodology, rapid prototyping, and craftsmen;
- knowledgeable of hybrid technology, vehicle dynamics, on-board electronics, telemetry, etc...
- having relatively nominal differences in language, design and business culture
- The entry of Liberty Media means ownership of McLaren - should they purchase the F1 team as well - will involve less financial risk if a franchise system is adopted, where team owners hold an equity and profit stake in the business. If the business does well, all stakeholders will as well.
- A large component of Apple's success centres on the success of their marketing.
- By entering F1, they'll gain access to one of the most lucrative and well connected marketing platforms on earth.
- Red Bull have leveraged a media empire on the back of their F1 investments.
- Apple has a large and growing appetite as a platform and distributor of media.
- iTunes, Apple TV, Apple Music, etc...
- As some of you may know, Apple has a huge cash pile.
- What you may not know is most of this cash is located outside of the US.
- Were Apple to repatriate it, they'd lose 40% of it.
- Purchasing McLaren would make good use of some of that money.
- In terms of numbers, McLaren Technology Group would probably be valued at $2-$3 billion, if they're lucky.
- Apple has well in excess of $100 billion domiciled in overseas territories.
- Apple could afford to write McLaren off completely and it wouldn't even dent the bottom line of a single Annual Report, let alone their cumulative position.
Why would McLaren be interested?
- A huge payoff for Ron, Mansour and Mumtalakat Holdings.
