Tesla rival Lucid Motors to go public in $24-billion mega deal
On Monday, luxury electric vehicle maker Lucid Motors agreed to go public by merging with blank-check firm Churchill Capital IV Corp in a deal that valued the combined company at a pro-forma equity value of $24 billion.
Lucid, run by an ex-Tesla engineer, is the latest firm to tap the initial public offering market, with investors rushing into the EV sector, spurred by the rise of Tesla Inc and with emissions regulations toughening in Europe and elsewhere.
#LucidMotors is on a mission to elevate the expectations for electric vehicles. Today, we’ve entered an agreement to merge with CCIV. Going public will accelerate our efforts to introduce the most advanced EV's in the world.FEATURED STORIES
— Lucid Motors (@LucidMotors) February 22, 2021
The deal, which has a transaction equity value of $11.75 billion, includes a $2.1 billion cash contribution from CCIV and a PIPE (private investment in public equity) investment of 2.5 billion from investors.
Other prominent players in the sector went public through mergers with so-called special purpose acquisition companies (SPACs) last year. While some deals such as Fisker have delivered well, others such as Nikola have given up short-term gains.
Reuters was first to report last week that Michael Klein had launched a financing effort to back the Lucid deal.
The publicly traded shares of CCIV fell nearly a third to $40.35 in volatile extended trading, giving the merged company a market capitalization of about $64 billion. By comparison, General Motors Co is worth about $76 billion.
Lucid said it is on track to start production and deliveries in North America in the second half of this year with Lucid Air, its first luxury sedan. It had previously said it planned to start its deliveries in the spring of 2021.
Lucid, which plans to build vehicles at its factory in Arizona, aims to deliver 20,000 vehicles in 2022 and 251,000 in 2026 by adding other models like an electric sport utility vehicle.
With a starting price of $77,400, the sedan is slated to be the first to achieve a 500-mile (805 km) driving range.
After Lucid priced its sedan, Tesla chief Elon Musk announced a price cut to its flagship Model S sedan. “The gauntlet has been thrown down!” he tweeted.
CCIV, backed by Wall Street dealmaker and former Citigroup banker Michael Klein, and new private investors are getting shares at different prices, with the newer private investors paying a premium.
The deal with CCIV includes a private investment of $2.5 billion from Saudi Arabia’s Public Investment Fund, which BlackRock and others managed.
(Reporting by Niket Nishant, Shariq Khan and Sohini Podder in Bengaluru and Greg Roumeliotis in New York; Additional reporting by Hyunjoo Jin in San Francisco and Aishwarya Nair in Bengaluru; Writing by Subrat Patnaik; Editing by Stephen Coates and Gerry Doyle)