According to a report in Germany’s Automobilwoche, Audi has increased its offer to buy a stake in McLaren’s Formula One operation from $495 million to $718 million.

McLaren and Audi are set to sign a letter of intent later this month, and a supervisory board will meet to review the deal’s terms.

Last year, Audi’s parent corporation, Volkswagen AG, indicated interest in acquiring McLaren as a method to get a piece of the lucrative Formula One market. Formula One earned $787 million in the fourth quarter of 2021, a 62 percent gain year over year, with 1.55 billion viewers.

McLaren later canceled the agreement after determining that Volkswagen’s initial offer was too low.

McLaren Automotive, McLaren’s road car division, might be purchased separately by Volkswagen.  Porsche is considering a relationship with Formula One team Red Bull Racing, being one of Volkswagen’s 12 automobile firms and brands.

Volkswagen’s involvement follows the announcement of a joint development initiative between McLaren and BMW. On March 24, McLaren and BMW signed a memorandum of understanding to collaborate on the development of an electric sports vehicle architecture.

However, the arrangement isn’t legally binding, and it might be canceled if McLaren and Audi reach an agreement.

Last July, Volkswagen made a significant cut to its portfolio. It was revealed that the business would sell its high-end Bugatti brand to Porsche and electric manufacturer Rimac. Rimac will control 55 percent of the company, with Porsche owning 45 the remaining percent.

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