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Geely-Backed EV Battery Buying SPAC Falls After Deal
A Geely model is displayed in China in this 2021 file photo by Reuters.

Shares in Geely-backed SPAC dip on news of merger with EV battery maker SES

China’s Geely and SAIC are spreading their bets on global EV growth

 

(AF) Shares in the special purpose acquisition company (SPAC) Ivanhoe fell below its $10 listing price after it announced it is merging with Singapore-based electric vehicle (EV) battery maker SES Holdings.

The deal to buy SES was partly funded by China’s biggest automaker Geely and Chinese state-owned SAIC, which are both making multiple bets on growth in EV sales in different parts of the world.

Ivanhoe Capital Acquisition Corporation saw its New York Stock Exchange-listed shares fall to $9.96 on Wednesday July 14 in the latest unenthusiastic reception to a SPAC merger. 

EV battery maker SES Holdings said on Tuesday July 13 it would go public through a merger with the blank-check company in a deal that values the combined entity at $3.6 billion.

The deal will raise $476 million in proceeds for SES, including a private investment in public equity (PIPE) of $200 million from automakers including Geely Holding Group, General Motors, Hyundai, Kia, and SAIC Motor, along with institutional investors.

SES was founded in 2012 as a spin-off from the  Massachusetts Institute of Technology and operates two battery-prototyping facilities in the United States and China.

Ivanhoe raised $276 million in its initial public offering, which was completed in January, and is among many SPACs which have seen their share prices fall below the standard launch level of $10 recently.

The merger with SES is expected to close in the third or fourth quarter this year, after which the combined company will trade on the New York Stock Exchange under the symbol “SES”.

Earlier this week Geely’s subsidiary Volvo announced that it has bought additional shares in EV firm Polestar, taking its holding to 49.5%.

That investment came after Polestar raised $550 million in its first external funding round in April.

Expansion outside China

Geely, which has owned iconic car firm Volvo since 2010, has been looking for different ways to raise finance for expansion outside China and has reportedly considered both an IPO in Sweden for Volvo and a merger with a US-listed SPAC for Polestar.

Volvo said that it is acquiring its additional stake from PSD Investment, the private investment company of Eric Li, chairman of both Volvo Cars and its parent Geely Holding Group. PSD Investment will remain the second largest shareholder in Polestar.

“The move reflects Volvo Cars’ strong conviction in Polestar’s positioning and exciting potential in the high growth segment for premium electric vehicles,” the company said in a statement.

The purchase sees Volvo’s stake returning close to the level it had before the April funding round, when Polestar received a cash injection from Chinese investors Chongqing Chengxing Equity Investment Fund Partnership and Zibo.

“As recently announced the Polestar 3, which is based on Volvo Car Group’s next generation electric architecture, will be built at Volvo Cars’ plant in Ridgeville, South Carolina. By mid-decade it expects production of future Polestar models in Europe,” Volvo said.

EVs built in the US

The development of electric vehicles built in the US via Volvo could help Geely to sidestep potential challenges from ongoing political tensions between China and the US.

Polestar sales could also be boosted by the Biden administration’s planned $2.5 trillion infrastructure investment programme, which includes $176 billion of spending to boost electric vehicles.

Polestar currently builds hybrid performance cars in the western Chinese city of Chengdu and a sedan model at its Taizhou plant in China’s east. It also has a new model in development called Precept, an environmentally friendly sedan.

Geely promoted a range of electric vehicle brands at the Shanghai auto show in April, including Volvo and Polestar models.

Geely Auto, the firm’s mass market brand, showcased its flagship sport utility vehicle the Xingyue L.

Geometry, the mass market pure electric vehicle brand, launched its new extended range version of the Geometry A at the auto show. The Geometry A Pro offers users 600 kilometres of pure electric range, Geely said.

It also unveiled a new plug-in hybrid variant of the Lynk 05 at the Shanghai auto show, along with Geely’s newest premium electric vehicle brand, Zeekr, which launched the Zeekr 001 in its first official public event. Geely said the flagship model offers over 700 kilometres of pure electric range.

Geely’s recently appointed chief executive Daniel Li said late last month the company is still considering a listing on Shanghai’s Star board, after shelving earlier plans for a launch, but added that it is encouraging different brands it owns, such as Volvo, to make their own fundraising plans.

This report was updated on July 15.

 

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Volvo Ups Stake in EV firm Polestar as China’s Geely Eyes US Market

Jon Macaskill

Jon Macaskill has over 25 years experience covering financial markets from New York and London. He won the State Street press award for 'Best Editorial Comment' in 2016

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