There have been rumors about a merger of Churchill Capital IV, a special-purpose acquisition company, and Lucid for over a month.
A deal could use $2 billion in cash raised by Churchill Capital IV’s initial public offering and $1 billion to $1.5 billion from institutional investors to support the transaction.
The combined entity could be valued at roughly $15 billion, sources told Bloomberg.
Churchill Capital IV’s stock has skyrocketed more than 425% since reports first came out of talks between the Michael Klein-backed SPAC and Lucid Motors last month.
Investors are excited about Lucid’s prospects: It’s a real competitor to Tesla, and critics have praised its new all-electric vehicle, the Lucid Air. The company is set to launch its flagship model, the Air Dream Edition, in the second half of 2021.
Lucid is backed by Saudi Arabia’s sovereign wealth fund, which acquired a 67% stake in the EV maker for about $1.3 billion in 2018. Bloomberg reported earlier this year that Lucid was in talks to build an EV manufacturing facility near the Red Sea city of Jeddah.
If the merger goes through, it would continue a year of monumental growth for SPACs. They’ve overshadowed traditional IPOs in 2021, accounting for 63% of the nearly $77 billion raised on US exchanges, according to data from Bloomberg.
Churchill Capital IV is one of seven SPACs backed by Klein, a former Citigroup executive. Earlier this month, Klein raised $1.6 billion for his sixth and seventh SPACs.
Churchill Capital IV traded up 13.06%, at $59.81, at 10:38 a.m. ET.