NEW DELHI: Luxury electric vehicle maker Lucid Motors on Monday agreed to go public by merging with blank-check firm Churchill Capital IV Corp in a deal that valued the combined company at $11.75 billion.
CCIV, which is 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 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.
The deal with CCIV includes a private investment of $2.5 billion from Saudi Arabia’s Public Investment Fund, funds managed by BlackRock and others.
Investors in blank-check firms, hoping to catch the next Tesla Inc, have been on the hunt for electric vehicle (EV) startups. While some deals such as Fisker have delivered well, others such as Nikola have given up short-term gains.
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.
Its manufacturing plant in Arizona has a capacity of 34,000 units per year and is planned to be expanded to 365,000 units after full ramp-up and completion of future expansions. The electric sedan has a starting price of $77,400 and 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.
Founded in 2007 by former Tesla executive Bernard Tse and entrepreneur Sam Weng as Atieva Inc, Lucid received initial funding from Chinese technology company LeEco. In July last year, CCIV went public in a $1.8 billion IPO.
SPACs are shell companies that raise money through an IPO to take another company public within two years.