The American motorcycle manufacturer Harley Davidson is to spin off its electric vehicle division and take it public via a blank-cheque merger.
LiveWire intends to capitalise on a surge in demand among investors for stocks linked to the global automotive sector’s shift toward electrification.
As Harley-Davidson grapples with an ageing base of customers and the decline of motorcycling as a recreational activity, it launched the venture earlier this year in a bid to catch the attention of younger consumers searching for all-electric motorbikes.
Founded in 1903, Harley-Davidson is known across the world for its distinctive chopper-style motorcycles. The company, based in Milwaukee, Wisconsin, has 5,000 staff and a market value of $6.9 billion.
Yesterday it announced a $1.77 billion deal with AEA-Bridges Impact Corp, a special purpose acquisition company, or Spac, to drive LiveWire onto the New York stock exchange.
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Such “blank-cheque” funds raise money from investors through initial public offerings before listing their shares on a stock exchange. Then they search for an acquisition, typically a private company. Once a deal is struck, the Spac takes its target public by absorbing it. Early investors who stick around take a slice of the new, enlarged company.
In this case, AEA-Bridges Impact has built a cash trust of $400 million. Harley-Davidson is also set to invest $100 million and Kymco, another motorcycle manufacturer, will invest $100 million through private investment in public equity (PIPE).
Jochen Zeitz, chairman and chief executive of Harley-Davidson, will serve as chairman and acting chief executive of LiveWire for up to two years following completion of the deal. He said: “By building on Harley-Davidson’s 118-year lineage, LiveWire’s mission is to be the most desirable electric motorcycle brand in the world, leading the electrification of the sport.
“This transaction will give LiveWire the freedom to fund new product development and accelerate its go-to-market model.”
Shares in AEA-Bridges Impact rose 3.6 per cent, or 35 cents, to close at $10.20.
