(Reuters)-On Monday, luxury electric car manufacturer Lucid Motors agreed to a public offering through a merger with the blank check company Churchill Capital IV Corp. The transaction valued the combined company at $11.75 billion.
Lucid, run by a former engineer of Tesla (Tesla), is the latest company to enter the initial public offering (IPO) market.
Last year, other well-known companies in the field went public through mergers with so-called special purpose acquisition companies (SPAC). Although some transactions such as Fisker performed well, others such as Nikola gave up short-term gains.
In the turbulent extended transaction, CCIV’s publicly traded shares fell by nearly a third to $40.35, giving the combined company a market value of approximately $64 billion. In contrast, General Motors has a market value of approximately $76 billion.
Lucid said it is expected to start production and delivery in North America using its first luxury sedan, Lucid Air, in the second half of this year. It has previously stated that it plans to start deliveries in the spring of 2021
Lucid plans to produce vehicles at its plant in Arizona. The goal is to deliver 20,000 vehicles in 2022 and 251,000 vehicles in 2026 by adding other models (such as electric sport utility vehicles).
The car starts at $77,400 and is the first car to achieve a range of 500 miles (805 kilometers).
After Lucid set the price for the car, Tesla CEO Elon Musk announced a reduction in the price of its flagship Model S sedan. “The glove was thrown away!” He tweeted.
In CCIV, backed by Wall Street trader and former Citi banker Michael Klein, new private investors are acquiring shares at different prices, and new private investors are paying a premium.
The deal with CCIV includes a $2.5 billion private investment from Saudi Arabia’s public investment fund, as well as funds managed by BlackRock and other companies.
(Reporting by Nikit Nishant, Shariq Khan and Sohini Podder in Bangalore and Greg Roumeliotis in New York; other reporting by Hyunjoo Jin in San Francisco; writing by Subrat Patnaik; editing by Stephen Coates)