Liberty Media to purchase Formula One

Liberty Media to buy Formula One for $4.4B

Liberty Media will purchase auto racing league Formula One.

The mass media group will acquire Formula One in a deal that represents an equity value of $4.4 billion for the racing organization. Liberty Media will hold an 18.7 percent minority stake in the Formula One immediately, and then the remainder when the deal closes as early as the first quarter of 2017.

Chase Carey, executive vice president of 21st Century Fox, will be appointed chairman of Formula One. Bernie Ecclestone, current CEO of the racing group, will remain in his position.

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 One, which can be exchanged into Liberty Media shares. It will also assume $4.1 billion in Formula One's current debt.

After the deal, Liberty Media intends to change its name to the Formula One Group. CVC, the current largest shareholder of Formula One, will own about 65 percent of the to-be-renamed Liberty Media group, but it won't have control of voting shares.

Liberty Media's Liberty Capital division also owns the Atlanta Braves.

The U.S.-based company, which is controlled by Chairman John Malone, also has a 27 percent investment stake in Charter Communications, Inc., a 53 percent stake in Sirius XM Radio, Inc., and a 26 percent stake in Live Nation Entertainment Company, as well as smaller investments in Viacom, Time Warner, Sprint Corporation and Barnes & Noble, among others.

Reporting by CNBC's David Faber

Update: This story was updated to reflect that Liberty announced the deal.