LONDON Lewis Hamilton signed up for a fresh start with Mercedes on Friday in a deal that likely ended Michael Schumacher's Formula One comeback and catapulted Mexican Sergio Perez into the driving seat at McLaren.
After a season-long saga for his signature, Britain's 2008 world champion finally opted to cut the umbilical cord with McLaren and leave his first paddock 'home' in what could be the gamble of his career.
The 27-year-old will replace 43-year-old Schumacher from 2013 at Mercedes, winners in China this year but otherwise largely off the pace, after agreeing a lucrative three-year deal announced on Friday.
McLaren, getting their news in first, announced separately that Perez would partner 2009 champion Jenson Button in their lineup next season with both drivers guaranteed equal treatment.
Martin Whitmarsh, principal of the title-chasing Woking team, said Hamilton had been offered a hefty financial incentive to stay at McLaren but terms could still not be agreed.
"We made a very, very big financial offer, bigger than I believe any Formula One driver is enjoying today," he told reporters.
British media reports suggested the contract with Mercedes, McLaren's former co-owners, could be worth 60 million pounds ($97.15 million) with Hamilton in line for a basic annual salary of around 15 million.
Sports marketing experts predicted the deal, negotiated by XIX Entertainment who also manage the affairs of former England soccer captain David Beckham and U.S. Open winning tennis player Andy Murray, would transform Hamilton's global profile.
"Mercedes are a far bigger brand than McLaren globally," said Joel Seymour-Hyde of sports marketing agency Octagon. "The opportunities for him to have the Lewis Hamilton brand exposed and to become a figurehead for the company are that much greater," he added.
McLaren and Mercedes have backed the Briton since his early teens when he was making an impression in karting, after Hamilton had approached former McLaren principal Ron Dennis at a gala awards ceremony to tell him of his dream of driving one of his cars in Formula One.
The first black Formula One world champion, whose humble origins as the grandson of Grenadian immigrants to Britain contrasts with the Monaco lifestyle he now enjoys, has never driven for anyone else but said it was time for a fresh challenge.
"Mercedes-Benz has such an incredible heritage in motorsport, along with a passion for winning which I share," said the winner of 20 grands prix including three so far this season.
"Together, we can grow and rise to this new challenge. I believe that I can help steer the Silver Arrows to the top and achieve our joint ambitions of winning the world championships."
The move to Mercedes came after the German manufacturer signed a new agreement with the sport's commercial rights holders, guaranteeing their long-term commitment. They were the last of the major teams to do so.
There was no word on Schumacher's future plans, with the German widely expected to retire for the second time after making a comeback in 2010, three years on from his 2006 farewell to Ferrari.
"I have had three nice years with the team which unfortunately did not go as well as we all would have wanted on the sporting side," Schumacher, who could remain with Mercedes in an official capacity, said in a statement.
"I wish Lewis well and for the team to achieve the success we worked so hard for in the build-up. I would like to thank the team for their trust and all the guys for their unconditional commitment. I will now concentrate on the next races."
There are six rounds remaining but Schumacher will have a 10 place penalty on the starting grid for Japan, next week, after crashing into Jean-Eric Vergne's Toro Rosso in Singapore.
"He has no reason for any regret even though his comeback did not go as he would have liked," commented triple champion Niki Lauda, who will join the Mercedes team as a non-executive chairman of the board.
Schumacher has been on the podium just once since his comeback, in Valencia this year, and has finished only half of the races this season.
With Hamilton moving to Mercedes, the sport will have five world champions at different teams next season even without Schumacher.
Hamilton, who is fourth in the current standings and 52 points behind Ferrari's championship leader Fernando Alonso, will partner Nico Rosberg next year. The two were also team mates as teenagers in karting.
The move carries considerable risk for Hamilton despite its logic, with Rosberg's win in China this year the first by a Mercedes works team since 1955.
The gamble is that Mercedes, with all their undoubted resources and expertise, will make the most of new engine rules due to be introduced in 2014 and become frontrunners in the same way that Ferrari were dominant with Schumacher in the early years of the century.
The fear for Hamilton is that it could turn out more like the move of Canada's 1997 champion Jacques Villeneuve from Williams to BAR in 1999. Villeneuve was paid handsomely enough but never won another race over the next eight years.
However Hamilton is a driver who can make the difference and Mercedes principal Ross Brawn, whose team is descended directly from BAR, was confident of a happy outcome.
"The arrival of a driver of Lewis's calibre is a testament to the standing of Mercedes-Benz in Formula One and I am proud that Lewis shares our vision and ambition for the success of the Silver Arrows," he said.
"I believe that the combination of Lewis and Nico will be the most dynamic and exciting pairing on the grid next year, and I am looking forward to what we can achieve together."
Whitmarsh, accused by one reporter of dropping McLaren's 'best Wedgewood' China vase in letting a talent like Hamilton slip from his grasp, suggested McLaren was the best place to be for any driver wanting to win races and titles.
Informed personally by Hamilton two days ago of his decision to leave, he said they had snapped up Perez immediately.
"When you speak to him you realize he is very young but that is exciting...we undoubtedly believe we can develop him into a world champion in fairly short order," he said of a 22-year-old who has scored three podium finishes this year.
The sudden breakthrough in the hitherto stalled driver market will now put Ferrari into focus, with Brazilian Felipe Massa out of contract and his fate yet to be decided although many expect him to stay.
It will also open up a vacancy at Sauber.
(Editing by Mark Meadows)