Mail reporting it as a done deal now...
I believe it has opened the door a few degrees for Schumi to return to Ferrari for a swan-song year. Having said that, I will also say that I don't think it is likely, and, personally, I would keep Felipe. But if the team went with Schumi, I'd be ok with that decision as well.
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EXCLUSIVE: Hamilton signs for Mercedes as Schumacher's replacement
Lewis Hamilton will cut ties with his boyhood team McLaren and replace Michael Schumacher at Mercedes, Sportsmail can reveal.
Sources in Germany indicated that the car giants will announce Schumacher’s second retirement at their headquarters in Stuttgart on Friday morning, leaving the way clear for Hamilton to accept a deal worth up to £60million, including win bonuses, over three years.
It will bring to an end the Briton’s 14-year association with McLaren, the team who sponsored him from when he was a 13-year-old karting prodigy.
Hamilton’s critics will say he is leaving for money but it is understood the offers on the table were similar. His basic Mercedes salary of around £15m — the same figure he is on at McLaren — will maintain his status as one of the grid’s top earners alongside Ferrari’s Fernando Alonso and possibly Red Bull’s Sebastian Vettel.
That said, Mercedes will offer greater freedom than McLaren in letting Hamilton’s management company, Simon Fuller’s XIX Entertainment, to strike personal endorsements for their man.
More important than money — and Hamilton is known to be cautious with his finances — is his desire to improve on a return of one title in five completed seasons, a disappointing statistic for a driver who envisaged himself as a serial champion on his much-heralded arrival in Formula One.
The will-he-won’t-he saga has captivated the sport for months but in the end the attraction of a fresh start, away from a team where he has always been treated with parental care, appears to have been too hard for the 27-year-old to resist.
The other governing factor was his desire for a championship-winning car. McLaren team principal Martin Whitmarsh always claimed that staying put represented the best chance of success, but the evidence for that assertion is patchy: though they are regular race winners, McLaren have won just a single drivers’ title since 1999.
The question is whether Mercedes, who have support at board level in Germany but are run from Brackley, Northamptonshire, are better equipped to deliver. They have only been back in the sport as manufacturers since 2010, though in their previous guise as Brawn won the title through Jenson Button.
Ross Brawn, the engineering svengali behind all seven of Schumacher’s titles, remains team principal and his presence is sure to have been a major lure for Hamilton with significant changes to the engine regulations due for the 2014 season.
Brawn exploited a previous revamping of the technical blueprint in 2009, allowing Hamilton’s McLaren team-mate Button to waltz to his championship success. With Mercedes as engine makers, Brawn is well placed to conjure another trick.
Conversely, McLaren, who get their engines free from Mercedes as part of a long-term association, will have to pay for their supply from next year. That will put a strain on their budget.
Mercedes have won one race this season to McLaren’s five but it is probable that Hamilton would extract more from even this existing car than the 43-year-old Schumacher and his team-mate Nico Rosberg.
Hamilton is close to Norbert Haug, Mercedes’ head of motor sport, who often acted as an avuncular supporter of the young Briton back when the German manufacturers were in full partnership with McLaren.
As for Schumacher, he has been a shadow of his formerly dominant self since coming out of his first retirement in 2010. He has managed just one podium, this year in Valencia.
McLaren are likely to turn their attention to Sauber’s Mexican Sergio Perez. Another conceivable contender is Scotland’s Paul di Resta, of Force India.
Snap LRW! On the posting and the sentiment 
He'll be much better off! Im excited about this. I think if Whitmarsh had been fairer it may not have happened. Schumacher sticking around as a tester and development advisor whould be no mean thing either. Well new wardrobe needed 