Mercedes lose ??81m Henkel deal

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.

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39 comments on Mercedes lose ??81m Henkel deal

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

  2. Jay Menon said on 15th December 2009, 1:29

    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!

  3. Sush Meerkat said on 15th December 2009, 8:20

    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.

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

  5. It’s time for Nick to move on.

  6. Nick Fry really does make the mind boggle. Surely Ross can spot an incompetent at 50 paces by now?

  7. I have seen Nick Fry in person.

    His head is really big.


  8. As Meerkat pointed out, this looks like a serious scam from Brawn and Fry. It is not them who should have googled it, it’s Mercedes who wrongly trusted Brawn when they were probably showed that the team had the Henkel sponsorship. Brawn, and Fry for that matter, are the winners here, they sold the team and now the can say, oops, we did not know this, but we already have the 100 mill pounds in our pockets from Mercedes. Oh boy…

    • I’m sure Mercedes’ lawyers have already found the applicable representations and warranties in the team purchase agreement to wrap round Mr. Brawn’s neck. Looks like Ross does business as ruthlessly as his famous pupil used to drive.

  9. Hey there, You have done a great job. I will definitely digg it and personally suggest to my friends. I’m confident they’ll be benefited from this website.

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