John Malone's Liberty Media to buy Formula 1 for $4.4 bn

Liberty Media, a US media and communications company owned by the billionaire John Malone, yesterday struck a deal to buy world's leading motor-racing championship Formula 1 for $4.4 billion.

Under the terms of the deal, Liberty Media will initially buy an 18.7-per cent minority stake in of Delta Topco (the parent company of Formula 1) from a consortium led by private equity firm CVC Capital, and then the remaining when the deal closes as early as the first quarter of 2017.

Liberty Media will pay $1.1 billion in cash, 138 million Liberty Media shares and $351 million worth of an exchangeable debt instrument to be issued by Formula 1, which can be exchanged into Liberty Media shares. It will also assume $4.1 billion in Formula 1 current debt.

Post closing, Liberty Media intends to change its name to the Formula One Group.

CVC, the current largest shareholder and others of Formula 1, will own about 65 per cent of the non-voting shares in the to-be-renamed Liberty Media group and a board seat.

Liberty Media has stakes in several sports and entertainment businesses, including the Atlanta Braves Major League Baseball club.

The Colorado-based company also holds a 27 per cent stake in Charter Communications, a 53 per cent stake in Sirius XM Radio, and a 26 per cent stake in Live Nation Entertainment Company.

It also holds small stakes in Viacom, Time Warner, Sprint Corporation and Barnes & Noble.