Mercedes lands €30 million Petronas sponsorship

The Mercedes GP team has won the hotly contested battle to secure the sponsorship of Malaysian oil company Petronas, in what it describes as a "long term deal". The deal is a significant one, worth €30 million per season. Combined with the prize money the team won this season as Brawn GP, which is of the order of €50 million, this gives Mercedes an €80 million budget for 2010 before they themselves have injected anything, or any other sponsors have contributed.

Alongside Ferrari and McLaren, this team is starting to look like a new powerhouse team for Formula 1, something it never was under BAT or Honda ownership.

The team will be known as Mercedes GP Petronas F1 team, so it is basically a title sponsorship, although the sponsor name comes after the Mercedes name.

This is a great coup for the new Mercedes team, which was Brawn GP this year until Mercedes acquired a 75% stake.

In addition to the media value that Petronas will derive from being on a car which is likely to be pretty high profile in 2010, particularly if Michael Schumacher is driving one of the Silver Arrows, there is a strong business to business deal behind it. One of the incentives Mercedes can offer a company like Petronas is a deal to put its lubricants into its road cars, as Ferrari does with Shell, but clearly Mercedes is a far larger volume seller of cars, vans and trucks. Equally, Mercedes will look to leverage Petronas' networks in Asia for business growth. With McLaren, Mercedes had a long association with Mobil.

"Within the limits of the new Formula One resource restrictions, the Mercedes GP PETRONAS Formula One Team will be well positioned to achieve our goals, "said Mercedes' Norbert Haug. "We will all strive to present efficient success in the future knowing at the same time that the new Formula One season with some fundamental rule changes will be a particularly challenging one."

The deal is a blow to Sauber, which has a relationship with Petronas stretching back overy 10 years. Since being forced to take back the team from BMW, Peter Sauber is battling with not having any prize money rights and now has lost a major sponsor. It is also a blow to Lotus, which is Malaysian owned and which has strong political associations in Malaysia.