London (CNN Business)UK electric vehicle startup Arrival is going public in New York.
Arrival said in a statement on Wednesday that it has agreed to merge with "blank-check" company CIIG, in the United States, a deal that values the startup at $5.4 billion and gives it a stock market listing.
The transaction is expected to close in the first quarter of 2021. Arrival said it would raise around $660 million from the deal, and be listed on the Nasdaq under the ticker symbol "ARVL." Arrival had been ranked among the top 10 most valuable UK startups as a private company.
CIIG is a special purpose acquisition company, or SPAC, which means it has limited operating assets and raised capital through an IPO for the purpose of buying an existing business. CIIG was founded by Peter Cuneo, a former CEO of Remington Products who is also credited with turning around media giant Marvel.
Arrival is the latest electric automaker to take advantage of seemingly limitless investor appetite for SPACs. Rival startups Nikola Corp and Fisker both announced earlier this year they would go public via the same route.
A staggering $54 billion has been raised by US-listed SPACs this year, according to Refinitiv. That is four times more than the next closest annual total. And 2020 isn't over yet. During the third quarter, SPACs accounted for nearly half of all money raised by US IPOs, according to Dealogic.
Arrival has sought to stand out in the crowded field of electric vehicles by focusing its efforts on vans and buses. The company has also developed assembly "microfactories" that it says can be deployed anywhere in the world within six months.
Major carmakers Hyundai (HYMTF) and Kia Motors have already invested in Arrival, as have funds managed by investment giant BlackRock. UPS (UPS), another early investor, announced earlier this year that it would purchase at least 10,000 electric vans from the startup.
"Arrival's bold, game-changing approach to the production of electric vehicles made the company the clear winner in our search for a partner," Cuneo said in a statement on Wednesday. "We look excitedly to the future and to our partnership with Arrival's talented leadership team."
The world's top automakers have in recent years committed huge sums to the development of electric vehicles, a transformation needed to meet tough new emissions standards in China and Europe. The UK government on Wednesday moved up its ban on gasoline and diesel cars by five years to 2030.
Volkswagen (VLKAF) plans to roll out more than 60 new electrified models over the next decade, for example. Toyota (TM) has outlined a goal to have electric vehicles account for roughly half its sales by 2025.
— Michelle Toh, Matt Egan and Hanna Ziady contributed reporting.
