By Dhirendra Tripathi
Investing.com – Harley-Davidson stock (NYSE:HOG) soared over 12% in Monday’s premarket as the company said it will merge LiveWire, its electric motorcycle-making unit, with AEA-Bridges Impact Corp (NYSE:IMPX), a special purpose acquisition company.
The deal gives LiveWire an enterprise value of $1.77 billion. The move comes at a time when world over startups are taking market share away from established players dependent on vehicles running on fossil fuels.
Harley expects the deal’s $545 million proceeds to accelerate the rollout of LiveWire's products and enhance its global manufacturing and distribution capabilities.
The transaction will be financed by ABIC's $400 million cash held in trust, a $100 million investment from Harley-Davidson, and a $100 million investment from KYMCO, through a PIPE.
Harley will retain a stake of around 74% in the merged entity, ABIC's shareholders will own nearly 17%, and ABIC's founders and KYMCO will have an around 4% share each.
The transaction is expected to close by end of June.
Harley has attempted to position LiveWire as an all-electric motorcycle company, with a focus on the urban market.