Both entities have confirmed their impending merger, with the intention being for Lucid Motors to go public after the finalisation of the merger.
In February 2021, Lucid Motors and Churchill Capital Corp IV (CCIV) confirmed that they are currently in discussions to merge their operations. While the two entities only confirmed the merger in February 2021, rumours on the matter started circulating from as early as January 2021. Therefore, when CCIV submitted its Form S-4 to the United States (US) Securities and Exchange Commission on Friday, 19 March 2021, it addressed the inaccuracy in the earlier reports.
The company stated, “On January 11, 2021, Bloomberg published an article stating that Churchill was in discussions to acquire Lucid. However, at the time the article was published, Churchill and Lucid had not had any discussions with respect to a potential business combination. Subsequent to the Bloomberg article, Churchill began exploring a possible business combination with Lucid due to its interest in the electric vehicle industry, as well as Churchill’s familiarity with Lucid’s Chairman, Andrew Liveris, who is an operating partner of the Sponsor. Mr. Liveris did not participate in the evaluation of the Transactions on behalf of Churchill, nor did he participate in any discussions or negotiations between Churchill and Lucid.”
One of the reasons believed to be a motivating factor for the merger is that it will support Lucid Motors when it goes public. The company is planning to enter into the luxury electric car market and, as such, the merger will aid in Lucid Motors acquiring funds from investors when it goes public. For CCIV, the company reportedly stated that it sees the merger as an entry into the luxury electric car market.
Details on when the merger will be finalised are still unknown. However, it is projected that the process will probably be concluded in the second financial quarter of the year. Currently, the transaction is said to include an estimated $2.1 billion cash contribution by CCIV. CCIV will also contribute an estimated $2.5 billion, fully committed private investment in public equity (PIPE) with an investor lock-up provision that binds holders well beyond closing.