REG - Aston Martin Lagonda - Aston Martin Lagonda and Lucid Group, Inc.

Aston Martin Lagonda Global HoldingsAnnouncement

26/06/2023 07:00

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RNS Number : 8154D  Aston Martin Lagonda Glob.Hldgs PLC  26 June 2023

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

 Investors and Analysts
 Sherief Bakr    Director of Investor Relations              +44 (0)7789 177547

sherief.bakr@astonmartin.com

 Holly Grainger  Deputy Head, Investor Relations             +44 (0)7442 989551

holly.grainger@astonmartin.com

 Media
 Kevin Watters   Director of Communications                  +44 (0)7764 386683

kevin.watters@astonmartin.com

 Paul Garbett    Head of Corporate and Brand Communications  +44 (0)7501 380799

paul.garbett@astonmartin.com

 Teneo
 Harry Cameron                                               +44 (0)20 7353 4200

 

 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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