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Nico Rosberg is to remain at Mercedes for the next two years.
Rosberg has ended months of speculation by signing a new two-year deal with the world champions, which means he will continue to partner Lewis Hamilton until 2018.
Team boss Toto Wolff had warned that they were prepared to drop one of the drivers if they were unable to work with each other. However, despite Rosberg and Hamilton crashing twice this season, Mercedes have decided to keep the partnership intact for another two years.
Rosberg first joined Mercedes at the end of the 2009 season, partnering Michael Schumacher for the first three seasons before Hamilton made the switch from McLaren.
The German has been runner-up in the championship for the past two seasons but he currently holds a one-point lead over his team-mate heading into Sunday's Hungarian Grand Prix.
"We are delighted to announce that the Mercedes AMG Petronas Formula 1 Team has signed a two-year contract extension with Nico Rosberg for the 2017 and 2018 Formula One seasons," a statement from the team read.
"Nico has been a core member of the Silver Arrows since the team returned to the sport in 2010 and has played a crucial role in the team's success in that time.
"He has scored 19 Grand Prix wins and 25 pole positions so far with Mercedes-Benz and is currently leading the Drivers' World Championship."