What Does Red Bull’s 51% Stake in Bora-Hansgrohe’s Parent Company Mean for International Cycling?

Professional cycling almost saw two of its largest teams merge and compete, as on Soudal-Visma. The spark fizzled out in this deal, but come 2024, the face of cycling may just be undergoing its first major change. Energy drink and marketing mogul Austrian company Red Bull is all set to take a 51% controlling stake in RD Pro Cycling GmbH & Co. KG and RD Beteiligungs GmbH.

It is the parent company of the cycling team Bora-Hansgrohe, and the deal that was briefly touched upon at the start of the year will finally take place. The news came through a press release from the team, which said the deadline for objections to the acquisition was January 26. With the Federal Competition Authority and Federal Cartel Prosecutor raising no objections, the deal is approved.

A deal kept under wraps finally becomes official

News of their merger broke out on January 3 when Bora-Hansgrohe team boss Ralph Denk briefly spoke about it. The merger was still underway, and with no official confirmation, very little information was revealed. The only piece of information available was the one made public by the FCA. It talked about the nature of a merger—a joint venture—which would give Red Bull an indirect acquisition of a controlling interest of 51%.

With no objections raised to the merger between the two heavyweights, the deal finally got the green signal. Ralph Denk spoke extensively about the merger, and the excitement it brought, and briefly touched upon the road ahead.

He said, “With today’s decision, we have cleared an important hurdle. The foundations of our partnership with Red Bull are now officially in place. This is the green light we’ve been waiting for to go ahead with the formalities and many specific parts of the collaboration.”  

Even after the completion of the merger process, the team expects Ralph to maintain his position.

A paradigm shift is upon us

Experts in the cycling arena have already deemed it a game-changing moment for the sport, with the company moving from merely a sponsorship and marketing presence to having an actual stake in the team. Red Bull’s association with cycling is not brand new, but this move is perhaps the biggest one yet.

“Red Bull is planning to expand its involvement in road cycling,” is what Denk said on January 3. The expansion into team affairs will only propel the team to new heights and give the sport an even bigger platform. What does Red Bull’s active investment in Bora-Hansgrohe signify for the sport? Where is the future of cycling now heading?

Cycling team Bora-Hansgrohe steps into a new era

Currently, Red Bull already has an association with the team, apart from its 51% ownership. The sponsorship giants were associated with the team’s junior scouting initiative, called Red Bull Junior Brothers. Until now, the company focused solely on sponsoring individual athletes across various teams. Bora rider Anton Palzer is getting individually sponsored by the brand.

Other individual sponsors include Tom Pidcock (Ineos Grenadiers), Blanka Vas (SD Worx), Wout van Aert (Visma-Lease a Bike), and most recently Zoe Backstedt (Canyon-Sram). Such is the power and pull of a brand that the riders have special permission to wear a helmet from another brand. But now, all of that is set to change with their latest partnership.

Details of their merger, however, are still not out for public viewing. Team boss Denk stated that they will furnish further details as the season moves forward. Although he touched upon the fact that there will be no massive changes overnight, As the specifics of the deal will take time to come out, let’s try to gauge the areas of impact of this deal and how it spells the start of something new.

What does the future of cycling look like now?

The first and most urgent will be the status of individual sponsorships of players outside of what is now ‘their’ team. It will be interesting to keep track of the developments that erupt on this front and whether one of those players could be signed. For now, the limited information throws a magnitude of possibilities into the open; only time will tell which one is feasible.

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One thing is certain: the riders at Bora Hansgrohe will make use of the world-class facilities at the Red Bull Athletes Performance Centre. Exposure to better facilities and streamlined processes will further enhance the cycling pedigree of the team and give them a chance to compete for a win in the World Tour. Bora-Hansgrohe, a company that is famous worldwide for its marketing and advertising acumen, could be the next big team.

The award-winning Red Bull media house, combined with its world-class advertising team, is a recipe for success. Under the merger’s details, the ‘creation of advertising campaigns’ forms a massive part of the economic objectives.

Will this disrupt the riders’ transfer market?

Another area that this merger could shake up is the transfer market for 2025. Red Bull’s acquisition move seriously surprised experts, but it signals a bright future for cycling. With a whopping $1.64 billion in profit in the previous financial year, their entry could disrupt the market. The team is hell-bent on making an impact and has its eyes focused on winning the prestigious Tour de France.

Keeping this in mind, next year’s transfer market promises to be nothing less than a spectacle. According to reports, Bora has already put scouts out there to understand the status of Wout Van Aert and Remco Evenepoel. With potentially limited exit clauses in their current contract, the look of their team next year could be something entirely different.

“The arrival of Lidl as a title sponsor changed a lot for the 2024 rider market, raising team budgets, and so has the more recent arrival of Decathlon. The arrival of Red Bull will only raise the value of the biggest riders even more,” is what leading agent Alex Carera said.

Red Bull is in for the long haul

The goals of the team are not short-term victories but an overhaul of their current system to transform it into a world-beating unit. That is what they did with their F1 team, which made its debut in 2005. It took them five years to bag their maiden championship, and they went on to win four in a row. Currently, too, they sit at the top of the table, with no competition coming close to their level.

Their investment in Bora-Hansgrohe, for all the reasons stated above, makes it an exciting prospect. Fasten your seatbelts, cycling fans, and especially Bora-Hansgrohe fans, as they take flight into this new era. It will be worth finding out whether Red Bull truly ‘gives you wings’.

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