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February 22, 2021 11:15 AM, EST

Lucid Motors Reportedly Near Deal to Go Public

Lucid carsLucid Air prototype electric vehicles by David Paul Morris/Bloomberg

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Lucid Motors Inc. is nearing a deal to go public through a merger with a blank-check company started by investment banker Michael Klein that could be announced early this week, according to people familiar with the matter.

The combined entity will be valued at as much as $15 billion, the people said, asking not to be identified because the matter is private. Churchill Capital Corp IV, the special-purpose acquisition company, pared a gain of as much as 19% to trade 12% higher at $59.39 in early-morning trading Feb. 22 in New York.

The SPAC has been in talks to raise between $1 billion and $1.5 billion in funding from institutional investors to support the transaction, said the people, who asked not to be identified because the information isn’t public. The valuation and the amount of additional funding could still change based on investor demand.

A deal for the electric-vehicle maker could be announced Feb. 23, two of the people said. The talks are ongoing but could still fall apart.

The Churchill Capital SPAC is the largest run by Klein, a former Citigroup Inc. rainmaker, and has raised more than $2 billion for the transaction, the people said. Lucid is backed by Saudi Arabia’s sovereign wealth fund.

A representative for Lucid Motors declined to comment. A representative for Klein couldn’t immediately be reached for comment. The Churchill Capital SPAC already has surged more than fivefold since Bloomberg News first reported on the talks last month.

Several electric-vehicle makers have done deals with SPACs as startups seek to bulk up and raise cash to compete with industry leader Tesla Inc. Lucid would be one of the most established electric-vehicle companies to take this route.

Lucid also would be one of the largest SPAC deals to be announced since the blank-check company rush started, likely beaten only by United Wholesale Mortgage’s merger with Gores Holdings IV Inc., which was valued at around $16 billion.

Lucid is targeting the luxury end of the EV market, and CEO Peter Rawlinson was previously Tesla’s chief engineer on the Model S sedan. Saudi Arabia’s sovereign wealth fund has invested more than $1 billion in the company.

Lucid was founded in 2007 under the name Atieva and spent years being more focused on battery technology than pursuing development of a luxury car. It pivoted in 2016, changing its name to Lucid and beginning work on the Air sedan.

Lucid plans to start deliveries of a $169,000 version of the Air to U.S. customers in the second quarter. The car, which the company says will offer 500 miles of range, will be built at its factory in Arizona. The company plans to offer more affordable versions from 2022 and later will build a battery-electric SUV.

Crystal Tse, Ed Ludlow and Dinesh Nair were the main contributors to this report with assistance from Kiel Porter.

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