Polestar Merges With An Acquisition Company

Electric car maker Polestar signs $20 billion deal with Gores Guggenheim

Swedish electric car maker Polestar said it will list its stock via a merger with a blank check company backed by billionaire Alec Gores and investment bank Guggenheim Partners in a $20 billion deal.

This deal comes at a time when mega deals with SPACs are becoming rare, especially with the collapse of the SPAC dealmaking industry rapidly during the summer season after investors panicked about the poor financial performance of many of these companies in addition to the censorship campaign led by the US Securities and Exchange Commission against their statements and announcements, and the deal will be a test of investors’ appetite for such deals after the turmoil in the electric vehicle sector over the past few months.

The Polestar transaction will be backed by cash proceeds of up to $800 million from Gores Guggenheim given that no blank check shares will be redeemed from shareholders in the blank check company, and will also include a $250 million private equity investment by top institutional investors.

SPAC are publicly traded companies, developed and incorporated with the aim of merging with a private company at a later time, for a company seeking to list its stock on the stock exchange, SPAC deals represent a newer alternative to the traditional initial public offering.

Following the news, Gores Guggenheim’s stock rose 3% ahead of the market’s opening, and the resulting new company will be named Polestar Automotive Holding UK and trade on the Nasdaq under the “PSNY” tag, according to the report.

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