Mercedes-Benz has announced that it has taken over the Brawn Formula 1 team and re-named it Mercedes Grand Prix after buying a 75.1 per cent stake in the squad.

The German car giant will retain its role as McLaren's engine supplier until at least 2015, but will sell its 40 per cent stake in the squad back to the team over the next two years.

"Mercedes will compete in the F1 world championship next year starting with its own factory team," said head of Mercedes cars, Dr Dieter Zetsche.

"This is possible by the agreed acquisition of 75.1 per cent of Brawn GP, 45.1 per cent from Daimler and 30 per cent from our partner Aabar Investments. The rest will be with the current share - Ross Brawn, Nick Fry and other members. The interests of Daimler are aligned therefore it will be a true Mercedes-Benz team.

"Ross Brawn will continue to be the team principal and thereby we are maintaining his strength. Just like the engine team at Mercedes Benz High Performance Engines, the new Mercedes Benz grand prix team will be co-ordinated by Mercedes Benz Motorsport which is as everybody knows headed by Norbert Haug."

The team will be run out of Brawn's current headquarters in Brackley, rather than from a new facility.

Team principal Brawn said that he could not have imagined such a partnership happening 11 months ago when Honda announced it was pulling out of F1, leading to a winter of uncertainty for the squad that was soon to become Brawn.

"Both I and my fellow directors at Brawn GP are incredibly proud of our staff, drivers and everyone associated with our team and thank them for their commitment, outstanding teamwork and their focus on achieving results in sometimes difficult circumstances," he said.

"The senior management group will remain in place to lead our team and on behalf of everyone at Brawn GP, we are honoured to be representing such a prestigious brand as Mercedes-Benz in Formula One next year and will be working together to do our best to reward their faith in our team."

The deal means that Mercedes will compete in Formula 1 as a full factory team for the first time since Juan Manuel Fangio won the world title in 1955.

Neither driver has yet been announced for the new squad. 2009 driver Rubens Barrichello has already joined Williams for next season while Jenson Button has yet to decide on his future.

AUTOSPORT understands that Nico Rosberg will be one of Mercedes' drivers, while the company's motorsport chief Norbert Haug said on Sunday that discussions have taken place with former BMW Sauber driver Nick Heidfeld.

Mercedes is reportedly proposing to pay Michael Schumacher 7 million euros if he agrees to return to F1 as Nico Rosberg's teammate in 2010.

Bild newspaper said the offer, which is the same one offered to Jenson Button prior to the new world champion's switch to McLaren, will be made by the German marquee’s competition boss Norbert Haug.

Schumacher, 40, made much more money at Ferrari until 2006, and still makes 5m a year as an adviser to the Italian team, but Bild said Mercedes cannot afford to offer the German any more.

Niki Lauda told the newspaper he is certain "money will not
play a role" in Schumacher's decision about whether to re-launch his 16-year F1 career.

Stories have emerged in Germany of an alleged sponsorship scam that could leave a massive hole in the budget of the new Mercedes GP team.

Before the takeover of the team was finalized Brawn GP apparently agreed a mega sponsorship deal with the Henkel consumer products company, whose roster of famous brand names includes Persil, Schwarzkopf, Loctite, Unibond and Pritt.

As the company is headquartered in Germany there was obviously a lot of synergy with both the Mercedes tie-up and the decision to hire Nico Rosberg (and just possibly, Michael Schumacher). Signed at the end of July, the deal is believed to be for as much as €30m, or $43m a year, for three years. The timing may help to explain why Rosberg topped the team’s shopping list in the summer.

It is now apparent that the guy who signed the deal was not authorized to do so, and furthermore was using the company’s name for his own ends.

Only after the Mercedes deal was finalized – and the company announced to the world that it will be spending a lot less in the future compared with being a partner of McLaren – did the truth apparently come out, and only then after the Mercedes CEO contacted his opposite number at Henkel

Henkel now denies that it has any obligations to Brawn/Mercedes, who naturally enough claim the reverese is the case,

If this really was the mega sponsor that the team was planning to rely on, there could be a lot of explaining to do...