Aston Martin Lagonda and Lucid Group, Inc.
26 June 2023
Aston Martin Lagonda Global Holdings plc
Aston Martin Lagonda and Lucid Group, Inc. to enter in to strategic supply agreement to create industry-leading ultra-luxury high performance electric vehicles
· Agreement to include access to Lucid's industry-leading technologies and long-term relationship whereby Lucid will supply Aston Martin with select powertrain components for initial and certain future BEV models
· Under the terms of the proposed agreement, Aston Martin would issue 28,352,273 new ordinary shares to Lucid and make phased cash payments to Lucid, with the aggregate value of shares issued and cash payments totalling approximately $232m (£182m)
· Lucid Group would become a c. 3.7% shareholder in Aston Martin Lagonda Global Holdings plc
· Agreement subject to shareholder approval, with irrevocable commitments to vote in favour received from Yew Tree Consortium, Mercedes-Benz and Geely representing 48.1% of issued share capital. As PIF, controlling shareholder of Lucid, cannot vote on the resolution approving entry into the agreement with Lucid, 58.5% of the votes in respect of that resolution are in fact secured
Aston Martin Lagonda Global Holdings plc ("Aston Martin", "Aston Martin Lagonda" or the "Company") and Lucid Group, Inc. ("Lucid") have today announced their intention to enter into a unique and innovative supply arrangement between their respective groups, which will support Aston Martin's high-performance electrification strategy and long-term growth.
Under the terms of an initial Implementation Agreement entered into today between Aston Martin and Lucid, subject to receiving shareholder approval and the satisfaction of certain regulatory and other conditions, the parties have agreed to enter into integration and supply agreements that would provide Aston Martin with access to Lucid's industry-leading technology for its BEVs, including electric powertrains and battery systems.
The proposed alignment of Aston Martin's iconic brand, ultra-luxury craftsmanship and high performance in-house engineering excellence, with Lucid's advanced technologies and expertise in luxury electric vehicles, would create an unrivalled combination with the capabilities to re-define the customer experience for future Aston Martin BEV products.
The supply agreement would also complement the bespoke development of a single BEV platform by Aston Martin that will be utilised across its future electrified product portfolio, and support the Company's target to launch its first BEV in 2025.
In consideration for receiving access to Lucid's industry-leading technologies, Aston Martin has, subject to shareholder approval and the satisfaction of certain regulatory and other conditions agreed to:
· issue 28,352,273 new ordinary shares in its share capital to Lucid (the "Consideration Shares"), equivalent to approximately $100m[1] (£79m) in value, which will see Lucid become a c.3.7% shareholder in Aston Martin (by reference to Aston Martin's current issued share capital). Subject to certain customary exceptions, Lucid has agreed not to dispose of the Consideration Shares for a period of 365 days from the date of their allotment
· make certain phased cash payments to Lucid in the aggregate amount of $132m (£104m), with (i) an initial amount of $33m (£26m) payable on the date of admission of the Consideration Shares to listing on the premium listing segment of the Official List of the Financial Conduct Authority and to trading on the Main Market of London Stock Exchange plc; and (ii) subsequent amounts payable in multiple stages on certain future dates in 2025 and 2026
· under the terms that will govern the supply arrangements, commit to an effective minimum spend with Lucid on powertrain components of $225m (£177m)
· under the terms that will govern the integration work carried out between the parties to integrate Lucid technology into Aston Martin BEVs, pay Lucid an additional $10m (£8m) integration fee
The Implementation Agreement includes certain exclusivity provisions for the benefit of Aston Martin, as well as customary warranties and termination rights.
As the agreement entails a related party transaction the Company will separately publish a shareholder circular (the "Circular") in due course, which will contain notice of the General Meeting of the Company (the "General Meeting") required in connection with the strategic supply agreement for the Company to seek approval from its shareholders. Subject to receipt of the necessary shareholder approvals, the Consideration Shares will be issued to Lucid following the General Meeting and satisfaction of certain regulatory and other conditions.
In connection with the General Meeting:
· Yew Tree Overseas Limited, on its own behalf and in its capacity as Representative Shareholder on behalf of the members of the Yew Tree Consortium (being Yew Tree Overseas Limited, Saint James Invest SA, J.C.B. Research, RRRR Investments LLC, John Idol, Francinvest Holding Corporation, ErsteAM Ltd and Omega Funds I Limited) which owns approximately 21.1% of the issued share capital of the Company as at the date of this announcement, has irrevocably agreed to vote in favour of the strategic supply agreement at the General Meeting
· Geely International (Hong Kong) Limited and Geely Group Limited (together, "Geely") which together own approximately 17.6% of the issued share capital of the Company as at the date of this announcement, have irrevocably agreed to vote in favour of the strategic supply agreement at the General Meeting
· Mercedes-Benz AG ("MBAG") which owns approximately 9.4% of the issued share capital of the Company as at the date of this announcement, has irrevocably agreed to vote in favour of the strategic supply agreement at the General Meeting. The Company has also today released a separate announcement of certain changes that it and MBAG have agreed to make to the Strategic Cooperation Agreement that has been in place between them since October 2020
Lawrence Stroll, Executive Chairman of Aston Martin, said: "The proposed supply agreement with Lucid is a game changer for the future EV-led growth of Aston Martin. Based on our strategy and requirements, we selected Lucid, gaining access to the industry's highest performance and most innovative technologies for our future BEV products.
"We will not only leverage the significant investments Lucid has made to develop its world-class technologies, but will also further enhance and differentiate the drive experience through the work Roberto and his teams are already developing, aligned with our ultra-luxury, high-performance strategy.
"Along with Mercedes-Benz, we now have two world-class suppliers to support the internal development and investments we are making to deliver our electrification strategy. With the recently announced long-term partnership with Geely, we will also gain the opportunity to access their range of technologies and components, as well as their deep expertise of the key strategic market of China.
"Overall, today's announcement is a further significant step towards delivering our ambition for Aston Martin."
Roberto Fedeli, Chief Technology Officer of Aston Martin, said: "The proposed agreement with Lucid forms a significant pillar of our electrification strategy, providing Aston Martin with access to the industry's leading powertrain and battery systems technology. Combined with our internal development, this will allow us to create a single bespoke BEV platform suitable for all future Aston Martin products, all the way from hypercars to sports cars and SUVs.
"In addition, we will continue to expand our in-house powertrain capabilities, allowing us to provide the thrilling performance and intense driving experience we know that our customers love and expect from Aston Martin."
Peter Rawlinson, CEO of Lucid Group, said: "This partnership will represent a landmark collaboration between Aston Martin, a storied marque with a rich history, including winning at Le Mans and its current successes in F1, and the very best of Silicon Valley innovation and technology from Lucid.
"In line with its strategy, Aston Martin selected Lucid, recognizing the profound benefits of adopting its world-leading electric drivetrain technology, exemplified by the breakthrough 520-mile EPA-estimated range achieved by the Lucid Air Dream Edition."
Racing. Green.
Today's announcement marks the latest development in Aston Martin's ongoing work to develop alternatives to the internal combustion engine, as part of its broader Racing. Green. sustainability strategy. In line with its electrification roadmap, Aston Martin's first plug-in hybrid - the mid-engine supercar Valhalla - will commence delivery in 2024. By 2026, all new Aston Martin product lines will have an electrified powertrain option, with a target for its core portfolio of Sports / GT and SUV models to be fully electrified by 2030.
Related party transaction
Lucid is majority-owned and controlled by the Public Investment Fund ("PIF"), a substantial shareholder of the Company for the purposes of the Listing Rules as a result of being entitled to exercise, or to control the exercise of, over 10 per cent. of the votes able to be cast at general meetings of the Company. Lucid is therefore considered to be a related party for the purposes of the Listing Rules. The Listing Rules require that a related party transaction of a listed company above a certain threshold must be approved by its shareholders, other than the related party and its associates, unless certain exemptions apply. The terms of the related party transaction agreed between the Company and Lucid will require such shareholder approval. PIF (as an associate of Lucid) will not be permitted to vote its shares in respect of the related party transaction resolution at the General Meeting. Further details of the related party transaction and the corresponding resolution will be set out in the Circular.
Regulatory Disclosures
This announcement includes inside information as defined in Article 7 of the UK Market Abuse Regulation No. 596/2014 as it forms part of domestic law by virtue of the European Union (Withdrawal) Act 2018 and is being released on behalf of the Company by Liz Miles, Company Secretary.
Enquiries
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Investors and Analysts |
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Sherief Bakr |
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Harry Cameron
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[1] Calculated by reference to the 30-day volume-weighted average price of Aston Martin ordinary shares, and the USD/GBP exchange rate as of 23 June 2023
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