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Guan Xuan! Stellantis's acquisition of Zero Automobile shares completed

2024-05-27 Update From: AutoBeta NAV: AutoBeta > News >

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On November 20th, Zero announced that the terms of the subscription agreement for cooperation with Stellantis had been reached. Zero Motor will subscribe for about 194 million new H shares, which have been issued to Stellantis, with a total proceeds of more than HK $8.5 billion. At the same time, the announcement also announced that Dahua Technology will no longer hold shares in Zero cars.

The cooperation between the two sides began on October 26th, when Zero announced that it had reached a cooperation with Stellantis Group. Stellantis Group will invest 1.5 billion euros to acquire a 20% stake in Zero Motor and become a strategic shareholder of Zero Automobile. Stellantis Group will have two seats on Zero Automotive's board of directors, and Stellantis Group will appoint the CEO of Zero International Joint Venture. In addition, the two sides will also set up a joint venture called Zero International. With the exception of Greater China, the joint venture has the exclusive right to export and sell to all other markets around the world, as well as the exclusive right to manufacture zero-running car products locally. The establishment of the joint venture, which is also regarded by the industry as zero-running cars, is the right to operate overseas cars, which is dominated by Stellantis Group.

It is worth noting that the cooperation between the two sides hand in hand did not make the capital optimistic. On Oct. 26, Zero's shares opened high and closed low, closing at HK $32.8, down more than 20% from their intraday high. In the three trading days after the two sides announced the partnership, zero-running cars' shares continued to fall, closing at 27.1 Hong Kong dollars as of October 31.

To this end, on November 1, Zero announced that: based on confidence in the future development of the company, in order to promote the sustained, stable and healthy development of the company and safeguard the interests of the broad masses of public investors, the founders' group has made a voluntary ban commitment, it will not transfer or reduce its shares in the company in any way in the next 10 years from the date of this announcement. Or affected by the news, zero-running cars closed at 27.85 Hong Kong dollars, up 2.77%. The cooperation between Zero Auto and Stellantis is not optimistic about capital, which has something to do with the transfer of Dahua shares, the major shareholder behind it. Because of the 20 per cent stake acquired by Stellantis, 9000 million shares came from the transfer of Dahua, the former parent company of Zero Motor. For outsiders, the liquidation of major shareholders' shares will naturally feel uneasy.

In response, Wu Qiang, co-president of Dahua, responded that: Dahua's withdrawal is a very good arrangement, and these parties have straightened out or completed the historical mission of each company in each period through transactions. Dahua is our founding shareholder and a separate entity. Dahua itself should also focus on the main business, investing in zero-running stocks is not the main business of Dahua shares, so Dahua shares invest for a long time to make a profit, which is an important measure to focus on the main business. In addition, it also said that Dahua shares have been included in the list of US export control entities, and that the withdrawal of Dahua shares can reduce unnecessary regulatory friction in overseas business development.

In return, the cooperation between Zero Motor and Stellantis is undoubtedly the result of each taking what he wants. Relevant data show that Stellantis is a multinational automobile group formed by the merger of Peugeot Citroen (PSA) and Fiat Chrysler (FCA). It currently owns auto brands including Peugeot, Citroen, DS, Jeep, Fiat, Chrysler and Maserati. Although its brands are numerous, its share in China's automobile market is not high. With the withdrawal of Guangzhou Auto Fick, only a few brands such as Peugeot and Citroen remain in Stellantis Group in China.

With the rapid development of new energy vehicles in China, the products of Stellantis Group are still mainly fuel vehicles, so it is very passive in the aspect of electric transformation. In order to improve its competitiveness in the fast-growing new energy vehicle track, Stellantis has said it plans to invest at least $35.5 billion in electric vehicles and related technologies by 2025, with a goal of selling all pure electricity or hybrid products in the European market by 2030.

This time, in cooperation with Zero cars, Stellantis can take advantage of Zero cars' technological advantages in new energy to produce more competitive electric vehicles. Through cooperation, zero-running cars can not only get a good sum of funds and solve the urgent financial needs, but also be conducive to the development of zero-running cars in overseas markets.

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