Mercedes lose ??81m Henkel deal

Posted on | Author Keith Collantine

Mercedes and Henkel branding together on the 2007 McLaren MP4-22
Mercedes and Henkel branding together on the 2007 McLaren MP4-22

The new Mercedes Grand Prix team has suffered an early setback with the potential loss of a sponsorship deal worth ??81m (??90m / $130m).

German financial newspaper Handelsblatt reports Brawn signed a three-year contract with Henkel in July. But Henkel now claims its head of sponsorship activities did not have the authority to approve the deal and is refusing to honour it.

Update: Official statement from Henkel below.

The former McLaren sponsor claims the employee, who has since been fired, arranged the deal using stolen Henkel stationery. Daimler and Henkel are now in dispute about whether the money should be paid.

The revelation comes amid increasing speculation about Michael Schumacher being brought into the team for 2010. But would the be able to pay his salary without this deal in place?

Update: Henkel have issued the following statement:

Fraudulent Formula 1 Sponsorship

Clear position in fraud case involving Willy Luchs and former Henkel employee

Brawn GP concluded Formula 1 sponsorship agreement with Dutch letterbox company ERE B.V.
Alleged guarantee by former Henkel employee issued without Henkel?s authorisation or knowledge
Brawn GP disregarded any due diligence
Henkel informed Daimler at the end of September that no sponsorship agreement existed with Brawn GP
Henkel filed court proceedings against Brawn GP in mid-November: no liability for fraudulent actions

Dusseldorf ?ǣ A fraud case, in which the Dusseldorf Prosecutor?s Office is investigating the previously convicted fraudster Willy Luchs and a former Henkel employee, has greater scope than originally believed.

Brawn GP has concluded a 3-year sponsorship agreement for 90 million euros with the Dutch letterbox company operated by the convicted fraudster Willy Luchs. A former Henkel employee is alleged to have entered into a Guarantee from Henkel to support such sponsorship agreement.

Additionally, it is totally unprecedented to believe that an employee at the 5th management level of a DAX-listed company would have been authorised to either negotiate or sign agreements of such magnitude and commercial profile without involving the company?s senior management, Finance, Marketing or Legal departments. The appropriate level of diligence does not appear to have been undertaken by Brawn GP as even a simple ??Google?? search would have revealed Willy Luchs? criminal past.

Following an enquiry by Daimler on September 28, Henkel informed Daimler that a Formula 1 sponsorship agreement with Brawn GP neither exists nor was planned.

On October 28, after Henkel was informed by the Dusseldorf Prosecutor?s Office and the fraudulent acts became apparent, it immediately notified Daimler of the acts of Willy Luchs and the former Henkel employee. Henkel fully supports the Dusseldorf Prosecutor?s Office in their investigations.

On November 13, Brawn GP demanded payment from Henkel with a fixed deadline and with the threat of legal action. To safeguard its legitimate interests, on November 19 Henkel began court proceedings against Brawn GP in the Dusseldorf District Court in order for the Court to determine that there are no obligations whatsoever on Henkel on the basis of the existing documents. Henkel will not accept a fraudulent sponsorship arrangement with Brawn GP, based on clear and obvious fraudulent acts.

39 comments on “Mercedes lose ??81m Henkel deal”

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  1. If he did return I’m sure the sponsors would emerge pretty quick. I just wish I’d tried buying the Lotus name with stolen stationary…

  2. The former McLaren sponsor

    Thanx. Never knew they terminated their contract with McLaren.

  3. “The former McLaren sponsor claims the employee, who has since been fired, arranged the deal using stolen Henkel stationery.”

    hmmm ***?!

  4. Could they pay Schumi whatever amount, without Henkel? Doubtless. Mercedes has more money than they know what to do with. In spite of their crying about low sales figures and industry recession. They are doing well enough to buy out Ross Brawn, eh?

    Should a fraudulent deal be honoured now? Of course not. How can Mercedes even think about pushing it through! Ridiculous.

    1. They want the money so can’t blame Merc for trying. It’s an internal dispute and Merc thought they were getting the money.

    2. Why would they be paying Schumi “whatever amount”? I thought Rosberg had a clause in his contract to say that he had to be the highest paid driver..

  5. Do you think they will be able to afford a good driver with that money gone.

    1. The Cheatmacher should be able to raise his own pay cheque, but what were Brawn doing? They should have had the Facts verified by their legal team, and this would never have occurred.

  6. I had no idea McLaren and Henkel had split…(drum roll?)

  7. Maybe Henkel signed on the basis that Button was Pritty much staying – marketing benefit with “1” on the car. Now he’s gone to McLaren and the they can’t use the PeRsil. Mercedes feel that they have them loctite into a deal. Leaves them on a bit of a sticky wicket!

    Sorry couldn’t resist it

  8. José Baudaier
    14th December 2009, 18:48

    I must say that if Schumi was really to drive for Mercedes I’m sure it wouldn’t have any problem finding a big sponsor. Schumi would bring a huge attention to the team, any sponsor dream.

  9. I’ll be honest but I never noticed they sponsored Mclaren even tho Ive had them as my desktop for the past few years!.. Money well spent over the past few years by Henkel then! I agree with Jose; Schuey will attract big sponsors.

  10. From now on I´m not going to drink any more Heinkel beer

    1. I mean Henkel beer

  11. Prisoner Monkeys
    14th December 2009, 22:10

    Hats off to Nick Fry for organising this.

    1. Another screw up by Nick Fry. He’s outta there.

      1. Prisoner Monkeys
        14th December 2009, 23:06

        Here’s his greatest hits so far:

        – He got into an argument with Geoff Wills back in 200 tha ended with Wills leaving the team.
        – He failed to find a sponsor for Honda in 2007, meaning Honda started the Earth Dreams campaign. While original and certainly noble, it also meant Honda could never accept another corporate sponsor dollar, effectively killing their evenue stream.
        – He decided that Jenson Button owed his championship to Brawn and played hardball with the World Champion … and lost.
        – Now he’s gone ahead and failed to do the diligence on this deal and cost them eight million pounds.

        Why the hell is he still around!?

        1. I think it was 81 million

      2. I think you’ll find the correct term is “Fry up”

  12. How ironic for Mercedes, when they entered F1 with Sauber the exact same thing happened. Peter Sauber had a sponsor, BROKER an economic journal, & the whole thing went south. Mercedes had to step in with some cash & eventually Swatch watch was used as a stopgap.

  13. Can anyone tell us if McLaren will still have Henkel on thier can in 2010? santander are still sponsoring McLaren because of the Abbey bank. so are Henkel still Sponsoring McLaren? nothing has been said to say that they will not be.

  14. Gut feeling is that this was leaked to set the stage for Nick Fry’s depature from Merc GP . He is just deadweight now that Merc has taken over.
    I also think that Schui is moving to Merc not as a driver but as CEO alongside Ross.At least Schui as CEO makes sense in the long term picture for him and Merc

    1. Prisoner Monkeys
      14th December 2009, 23:31

      Schumacher has zero CEO experience.

      1. So if Schui’s got 0 experience that’s 100 points above what Nick Fry’s got. If Nick was a driver he’d forget to put his helmet on ,not that there’s anything inside his head that would get damaged, oh, exept his ego but then again that actually lives in his lower regions.

        1. Prisoner Monkeys
          15th December 2009, 2:10

          I tink it’s far more likely tha Mercedes ae lining Schumacher up for a drive, not some management position, however incompetenr Nick Fry is. There are easier ways to replace Fry – and with someone who has managerial skills – than to stage some elaborate conspiracy to hang him with a bad sponsor deal and then usher in a former World Champion in his place. Schumacher as a driver will make it easier for them to get sponsors than it would be if Schumacher was a CEO.

  15. That is a major setback for Mclaren.

    1. Prisoner Monkeys
      15th December 2009, 3:18

      It has nothing to do with McLaren.

      1. Well if Henkel moved away from sponsoring McLaren to now sponsoring no one, it sort of does involve McLaren too.

  16. Henkel is a German chemical not beer company. Anyway, Henkel’s slot in McLaren has been taken over by Nestle some time back.

  17. Mclaren didnt have Henkel sponsorship for the 2009 season. I know because I used to deal with them.

    I was supposed to get free executive box tickets courtesy of Henkel this year for Sepang. The sales exec told me Henkel pulled out, so no tickets!

  18. Mmmmmm interesting, now the balance sheets that Merc looked at when thinking of buying out Brawn would have included that enormous figure, it would have been an incentive to the board for a buyout since part of the monies could be recouped.

  19. I wonder what was written into the buyout contract with regards to taking on a team that isn’t what you thought it was?

  20. It’s time for Nick to move on.

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