German automotive publication, Automobilwoche (via Reuters) reported that Volkswagen’s Audi and BMW are interested in buying the McLaren F1 team and McLaren Automotive, respectively.

BMW has since denied the report, calling it flat out, “wrong.” Meanwhile, Audi did not directly comment on the issue. Instead, they reiterated that they “regularly consider different cooperation opportunities.”

McLaren has been hit hard during the pandemic. In July, the England-based company raised 550 million pounds (USD 738 million) from existing investors and the sale of preference shares and equity warrants to new backers Ares Management Corp. and Saudi Arabia’s Public Investment Fund. It also raised USD 620 million from a bond issue.

It’s been reported that the Volkswagen Group is interested in entering Formula 1. If it does, it will likely do so through their Porsche and Audi brands. Porsche will likely enter through Red Bull who’s set to develop its own engines when Honda pulls out by the end of the year. Meanwhile, Audi is said to be keen in buying a stake in McLaren.

For now, though, McLaren is denying any talk of a merger or buy in. They expect to return back to profitability soon thanks to more sponsorship money and a cost cap currently in place.

If Porsche and Audi want to enter into Formula 1, the decision will likely be made by December 15 when the FIA, Formula 1’s governing body, will decide on engine regulations for the 2026 season onward.

It’s understood that for the two German brands to enter the sport, they want the MGU-H, the most complicated part of the current turbo-hybrid powertrain. The MGU-H is used to recover or store energy to and from the turbocharger so once it disappears from the engines, energy recovery will then only take place on the rear axle.