DEI confirms discussions with Yates about merging

DEI confirms discussions with Yates about merging

By Sporting News Wire Service
April 29, 2007
08:30 PM EDT

TALLADEGA, Ala. -- The clear hope of a potential deal between Dale Earnhardt Inc. and Robert Yates Racing, reported Saturday on FoxSports.com, would be a strengthening of the organization that emerges from a sale, but a laundry list of major and minor details remains open for discussion.

The major details to be addressed include Dale Earnhardt Jr.'s future and the nameplate on the cars the new organization would field.

DEI's John Story confirmed Sunday that talks of a DEI acquisition of Yates had resumed in earnest approximately six weeks ago. A merger of the two teams would marry the power of Yates engines -- under the aegis of Robert Yates' son and premier engine builder, Doug Yates -- with the enhanced engineering and star power of DEI.

Concurrent with the discussions of a DEI acquisition of Yates are negotiations between DEI and Earnhardt toward the extension of Earnhardt's contract to drive for DEI, which will expire this year if not renewed. Max Siegel, president of global operations for DEI, and Kelley Earnhardt Elledge, Earnhardt's sister and business manager, are the principal negotiators of a possible extension.

Owned by Earnhardt's stepmother, Teresa Earnhardt, DEI fields Chevrolets for Earnhardt, Martin Truex Jr. and Paul Menard. Yates' two-car stable features the Fords of David Gilliland and Ricky Rudd.

Story said DEI already has a formal proposal from General Motors to extend the long-standing association between the Earnhardts and Chevrolet. Story also said DEI had been contacted by two other carmakers. The Sporting News confirmed independently that DEI has had preliminary discussions with Ford Motor Company.

According to Story, the deal with Chevrolet is not contingent on Earnhardt remaining at DEI. Story said performance is the crux of the issue in a potential deal with Yates. He stressed the company's commitment to establish DEI as "a perennial contender for championships."