The announcement of the agreement – Reuters
Stellantis and China’s Leapmotor announced that the automaker led by Carlos Tavares “plans to invest 1.5 billion euros to purchase approximately 20% of Leapmotor.” With the acquisition, Stellantis becomes a “significant shareholder” of the Chinese electric vehicle company Zhejiang Leapmotor Technologies, a statement said. The agreement also includes the formation of Leapmotor International, a joint venture with Stellantis 51% and Leapmotor 49%, with exclusive rights to export and sell Leapmotor products outside China. “We believe it is the perfect time to take a leadership role in supporting Leapmotor’s global expansion,” says Tavares. “Today is a milestone in the history of Leapmotor and I am happy to witness this moment with Tavares and his team”, specifies the CEO and founder of Leapmotor Zhu Jiangming.
For Stellantis it is a new attempt to expand in China after the divorce from Gac (Guangzhou Automobile Group) and the announcement in October 2022 of the bankruptcy of the company created to produce and distribute Jeep brand cars in the Chinese market. In the relationship with Leapmotor “we have a different position” from that previously had with Chinese partners “and we will avoid the mistakes of the past: this time we will be in the command seat”, observed Tavares in a press conference after the announcement of the investment on the 21st % in the Chinese company. “Leap will lead the brand in China, this does not exclude that Stellantis can sell its models” made with other manufacturers on the local market, he added. Tavares highlighted how the agreement places Stellantis in a different position: “Instead of being spectators of an offensive” – that of the Chinese manufacturers – “by remaining on the defensive we prefer to be on the attack”. “We act to serve our best interests,” he added.
After an initial positive reaction, Leapmotor reversed course and, amidst very volatile trading, went negative on the Hong Kong Stock Exchange: after the initial jump over 10%, in the wake of the euphoria of the strategic agreement signed with Stellantis, the company Chinese electric car manufacturer closed with a decline of -10.87%. The Hangzhou start-up will issue 194.3 million shares in a reserved capital increase at a unit value of HK$43.80, a 19% premium to Wednesday’s close of $36.80. At the end of the transaction, Stellantis will have approximately 21.07% of Leapmotor.
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