US special-purpose acquisition company (SPAC) Gores Guggenheim Inc has agreed a US$20bn deal to merge with electric-vehicle maker Polestar Performance AB.
The deal gives the Gothenburg-based company roughly US$800mln of cash and US$250mln in cash from ‘PIPE’ financing anchored by top-tier institutional investors.
Polestar, which was founded in 2017 by Volvo Cars and Zhejiang Geely Holding, currently has two cars in production (imaginatively named Polestar 1 and Polestar 2) and is growing sales in 14 markets across Europe, North America and Asia.
The Swedish company said it would use the proceeds from the business combination to help fund investment in products and the expansion of operations and markets, with plans to launch three new models by 2024.
Existing Polestar investors include Volvo and affiliates of Geely chairman Eric Li, and actor and activist Leonardo DiCaprio.
Last year it delivered approximately 10,000 vehicles and expects to sell approximately 290,000 vehicles per year by 2025, with chief executive Thomas Ingenlath saying the aim is to expand to 30 markets by 2023.
Ingenlath, who was director of design at Volkswagen before joining Volvo in 2012, and “The proposed business combination and listing position Polestar as a financially strong, future proof, global electric car company. It will enable us to accelerate our growth, strategy and most importantly, our mission towards sustainable mobility.”
Alec Gores, chairman of Gores Guggenheim, said Polestar “is truly differentiated from others given its premier vehicles, attractive financial profile, strong track record of performance, and the fact that it already has cars on the road across the globe.”