KEY POINTS

  • Arrival will raise $660 million through the deal
  • EV companies Nikola, Lordstown Motors, Canoo have announced a SPAC merger this year
  • Arrival plans to start production of its EVs in 2021

Electric vehicle startup Arrival will debut on Wall Street following a merger with a U.S. blank-check company, in a deal valuing the startup at $5.4 billion.

Arrival is the latest in a flurry of startups to opt for a non-traditional listing. It will merge with the U.S.-based CIIG Merger Corp, a special purpose acquisition company, set up by Peter Cuneo. A SPAC has no commercial operations and is formed strictly to raise capital through an IPO to acquire an existing company.

One of the U.K.’s 10 most valuable startups, Arrival will list on Nasdaq under ticker symbol “ARVL” and raise nearly $660 million, the company said in a release. The deal is expected to close in the first quarter of 2021.

The combined company will add Peter Cuneo, CIIG’s chairman and CEO, as non-executive chairman to its board of directors.

Startups seem to be favoring SPAC listings this year as Arrival’s main competitors, including Nikola, Lordstown Motors and Fisker, announced going public via the same route earlier in 2020. This year alone, SPAC listings have raised $54 billion, according to Refinitiv, and during the third quarter, SPAC deals raised half of the total money raised by U.S. IPOs.

Arrival seeks to produce budget electric vehicles with lower prices than its fossil-fuel competitors. It has two prototypes under development -- an electric bus and an electric van. By 2023, it will have four vehicles in the market.

The startup claims it has signed contracts with a total order value of up to $1.2 billion and its first products are planned to go into production in 2021. In the electric van space, one of Arrival’s major competitors would be Amazon-backed Rivian.

It operated stealthily until the end of 2019 but Arrival shot to fame when it announced a whopping $110 million investment from automakers like Hyundai and Kia. The startup also raised $400 million in private investment from investors, including Fidelity Management & Research, Wellington Management, BNP Paribas Asset Management and some funds managed by BlackRock. UPS announced recently it would buy 10,000 EVs from the company.

One of Arrival’s selling points is its assembly “microfactories,” which can be set up anywhere in the world within six months. Denis Sverdlov, founder and CEO of Arrival, said in the release, “CIIG’s leadership team has invaluable experience building businesses globally across a wide range of industries. We are excited to partner with them as we begin our journey to being a publicly-listed company and delivering our products to customers and cities around the world.”

For now, electric cars are more expensive to build than those which use petrol, as numbers aren't yet large enough to achieve economies of scale
For now, electric cars are more expensive to build than those which use petrol, as numbers aren't yet large enough to achieve economies of scale dpa / Patrick Pleul
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