Approaching SPAC
Polestar is moving closer to a public listing deal through a merger with a specialist acquisition company that would value the Swedish electric carmaker at $21 billion, according to sources familiar with the matter.
Polestar, owned by Chinese automaker Zhejiang Geely Holding Group Co. is in preliminary talks with Gores Guggenheim Inc. GGPI 0.30% and could strike a deal by Monday, sources said, if talks do not break down.
Polestar focuses on high-performance electric vehicles, positioning itself as a competitor to Tesla Inc. TSLA 2.75% and Lucid Group Inc. LCID 0.04% Zhejiang Geely is controlled by its chairman and billionaire founder Li Shufu. He owns Geely Automobile Holdings Ltd. GELYY -2.25% Volvo Car Group and several other electric vehicle brands.
This is one of the latest projects of SPACS, which has been active since the beginning of the year, and the most recent one which has slightly decreased. Companies with blank-paper will raise money through stock listing, without trading, and will seek a suitable company. They also collect additional resources under the name PIPE (Private Equity Investment in Public Capital).
Gores Guggenheim, Sponsored by The Gores Group LLC, and Guggenheim Partners, Investment Banking and asset management, raised about 3 billion during the eight-month Stock Exchange launch.
While Polestar is trying to capitalize on the desire of electric cars to innovate, the last year has been a failure, including a worldwide recall of vehicles due to faulty parts. Polestar's main production model, Polestar 2, which is sold as a rival of Tesla Model 3, has been delayed from the Chinese introduction. The company sold more than 1 million units last year on various markets around the world and plans to dramatically increase this figure by 2025, with the introduction of a new model in 2024.
In June, the company said its third model, an SUV called Polestar 3, would be assembled at Volvo's South Carolina plant. The rest of the company's models are made in China.
Several other well-known electric vehicle companies have gone public through deals with SPAC with varying degrees of success.
Some smaller rivals such as Nikola Corp., Lordstown Motors Corp. and Canoo Inc. have faced staff turnover, missed production targets and regulatory investigations since going public.
