Geely-backed Ecarx, which makes tech for car cockpits, is going public via a $3.5 bln SPAC merger. The record Chinese deal requires a leap of faith so soon after Didi’s wild listing ride, says KatrinaHamlin
its top line to more than double to $1.4 billion between 2022 and 2024 as it expands in China and beyond. To reach that figure, the company assumes revenue from non-Geely customers will triple over the same period, increasing their share of overall sales by some 7 percentage points.and other carmakers, some rivals might hesitate to take on a supplier so intimately linked to a competitor.
There are other possible potholes. Ecarx specialises in potentially sensitive technology: it collects and uses data, including personal information, and works with digital maps. Beijing’s sensitivities to data are part of the reason Didi plans to delist from the Big Apple and trades at a dramatic discount to its offer price., may be in a bit too much of a hurry: its own investors have the right to redeem their shares in the SPAC if it isn’t able to close a deal by early 2022.
With facilities in China and Europe, Ecarx focuses on tech used in car chips, high-definition maps and smart vehicles. The company was founded by Ziyu Shen, its current chairman and chief executive officer, and Geely’s Li in 2017. Li is the company’s largest shareholder. The deal would be the largest listing of a company hailing from the People's Republic through a special-purpose acquisition company, according to Dealogic.Editing by Una Galani and Thomas ShumOpinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.Sign up to our investor newsletter to get the latest news and trends in global financial markets.