SPAC CIIG closes in on Merger with EV innovator Arrival

CIIG Merger Corp (NASDAQ: CIIC) first announced the reverse merger with Arrival in November 2020. The SPAC company CIIG Merger Corp has since gained over 108% in the share price, illustrating a bullish investor sentiment. Arrival Ltd. has peaked the interests of investors, with its evolutionary EV passenger bus and van models. Furthermore, the interest from larger institutions such as BlackRock and the strong 2021 forecasts has investors on high alert. Recently, CIIG announced an official date for shareholders to vote on the proposed merger, 19th of March 2021. This is one of the final steps prior to a merger being finalised. This article will breakdown everything you need to know about the CIIC Arrival Merger set to close in Q1 2021.

What are the key details surrounding the CIIG merger?

Firstly, the merger between CIIG Merger Corp and Arrival Ltd was announced on the 18th of November. The definitive merger deal will see the SPAC merge with Arrival under the new listing of ARVL. In addition, the enterprise value of the merger is valued at $5.4 Billion. Arrival is expected to raise $660 million in cash proceeds to put towards the manufacturing and development of the Electric Vehicle models. Furthermore, the Arrival Board of Directors have voted for the approval of the transaction, which is to take place shortly after the shareholder vote on the 19th of March (assuming the merger is approved by shareholders).

Which “smart money” institutions hold CIIG stock?

Firstly, Institutional ownership can be a key factor when assessing SPAC listed companies such as CIIC. Looking at the largest institutional holders of CIIG and tracking their quarterly change in holdings can give investors a good idea of the current smart money sentiment. The institutions holding largest stake within CIIG are BlackRock, Omni Partners, Glazer Capital and P Schoenfeld Asset Management. Blackrock holds by far the largest stake in CIIC, with 6% stake or a current market value of $19.45 million according to MarketBeat data. BlackRock is widely known for its diversified portfolio of Electric Vehicle companies both within the United States, United Kingdom and China.

In addition, Magnetar Financial also maintains 6% ownership of the company and increased their position by 4,367.2%. Arrival has also landed larger investments from Hyundai Motor Company, Kia Motors Company, Winter Capital and UPS.

What you need to know about Arrival

  • The EV innovator Arrival has signed contracts with total order value up to US $1.2 billion. This has been a key driver in investor confidence for Arrivals long term outlook.
  • Arrival expects its first products to commence production in Q4 2021.
  • Arrival has 1,300 global employees located in offices across the United States, Germany, Netherlands, Israel, Russia, and Luxembourg.
  • The company plans for its first two Microfactories to be built in South Carolina, USA and Bicester, United Kingdom in 2021. The Microfactories have been a big talking point amongst retail investors after Jim Cramer called a buy rating on CIIC.
  • UPS has entered an agreement with Arrival to pre-order 10,000 EV vans.

“With Arrival’s products our clients are not forced to compromise between being green and being cost efficient. Our focus on the whole EV ecosystem, new methods of design and production and our enabling technologies are the key to driving down the cost of EVs and accelerating the transition to zero-emission transportation globally.”

said Denis Sverdlov, Founder and CEO of Arrival.

Overview of the CIIG Arrival merger

In summary, CIIG’s strong growth is attributed to the positive outlook on Arrival moving into 2021 and beyond. Although the company is yet to make their first delivery, investors can already see potential in the UK company. What stands out to me is the EV Bus model which if brought to commercialisation could prove a buying spree for Government transport industries in the UK and the US. Furthermore, Arrival offers an opportunity for US investors to differentiate from the saturated US and Chinese EV SPAC market.

Final words

In contrast, with a 108% growth in share price since the announcement, the market has recently pulled back on its valuation of CIIC. The added volatility as both companies close in on a merger date is to be noted by investors. To conclude, assuming the shareholder vote is successful we could see Arrival trading on Wallstreet shortly after the 19th of March.

Written by Tyger Fitzpatrick

The information above is not financial advice. Youth Investment Group has no liability for personal financial interests or investment decisions. You should make your own investment decisions based upon your own research and what you believe is best for you.

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