Mercedes chief Toto Wolff has warmly welcomed Honda's future partnership with Red Bull, adding that he is certain they will become a competitive force in Formula One.
Red Bull will switch from Renault to Honda at the end of this year in a move than enables the Milton Keynes-based British team to become, in effect, the Japanese manufacturers' 'works' entry.
"This is certainly the right step forward, looking from the outside, for all parties," said Wolff.
"It was important for Red Bull to have a works status. Long term probably the best chance to win a championship.
"Maybe short term, more work to do, but long term, from where I sit, absolutely the right decision. I am looking forward to tougher fights and tougher battles with Red Bull-Honda."
The Mercedes boss has enjoyed a long spell of sustained success with his team dominating easily from 2014 to 2016 before resisting a strong challenge by Ferrari last year.
"For us, as Mercedes, it is important that we have top brands in F1," he added. "The more we can attract the better for all of us and the better for the sport."
After a desperately disappointing partnership with McLaren ended last year, Honda have rediscovered their mojo this year in a new partnership with Toro Rosso, the Red Bull junior team.
This, in turn, has encouraged Red Bull to engage with Honda for the future in a deal that is regarded as perfect by team boss Christian Horner.
"The upside is what we're interested in, in terms of what is the potential," he said. "The commitment, the resource, the facilities that Honda have available to them is really exciting for us so to be the focal point of attention with the two teams is fantastic for us.
