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Leapmotor said in a separate statement that it would issue 194.3 million Hong Kong shares to Stellantis (NYSE:STLA) for HK$43.8 per share, a premium of 19% to its last close of HK$36.80.
After the subscription, Stellantis will own about 21.07% of Zhejiang Leapmotor’s total issued Hong Kong shares.
EV maker Leapmotor also announced the formation of a joint venture with Stellantis, in which the Chrysler parent will own a 51% stake giving it exclusive rights for the export and sale, as well as manufacturing, of Leapmotor products outside Greater China.
“Through this strategic investment, we can address a white space in our business model and benefit from Leapmotor’s competitiveness both in China and abroad,” Stellantis CEO Carlos Tavares said.
Stellantis, whose brands include Fiat and Peugeot (OTC:PUGOY), has a very small presence in China, the world’s largest auto market.
The group and rivals such as Renault (EPA:RENA) are concerned about growing competition from cheap Chinese electric cars in Europe.
Stellantis is scheduled to publish its third-quarter revenue figures next Tuesday.
The group last year closed its joint venture that makes Jeeps in China with local partner Guangzhou Automobile Group amid disappointing results.
($1 = 0.9466 euros)
