Hon Hai Precision Industry Co (鴻海精密) yesterday said that it had struck a final deal to buy the bulk of Lordstown Motors’ electric vehicle (EV) assembly plant in Ohio for US$230 million.
The US$230 million deal excludes certain assets, such as the hub motor assembly line and battery module and pack lines, Hon Hai said in a statement.
The company said that it would make a down payment of US$100 million by Thursday next week, and pay installments of US$50 million on Feb. 1 and once more before April 15 next year.
Photo: Reuters
“The balance of the purchase price will be paid at closing,” Hon Hai said.
To show confidence in the partnership, Hon Hai said it has also purchased US$50 million of common shares directly from Lordstown Motors at US$6.8983 per share.
Under the deal’s terms, both companies are to pursue a contract manufacturing agreement for the Endurance pickup truck, which must be entered into before closing, currently targeted for April 30.
Once the deal is complete, Hon Hai said it would receive 1.7 million warrants to purchase more Lordstown shares at US$10.50 per share.
The two parties are to also pursue a joint-venture agreement to codesign and develop vehicle programs for the global commercial fleet market, using Hon Hai’s MIH open platform for electric vehicle development, the Taiwanese company said.
“This partnership marks the commencement of integrating our resources with Lordstown Motors to develop Ohio into Hon Hai’s most important electric vehicle manufacturing and R&D [research and development] hub in North America,” Hon Hai chairman Young Liu (劉揚偉) said.
The Lordstown complex was once the largest internal combustion engine automotive plant in North America, and has since been converted into an EV manufacturing facility, Hon Hai said.
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