LORDSTOWN, Ohio and TAIPEI, Taiwan – Lordstown Motors Corp. (“Lordstown Motors” or “LMC”) (Nasdaq: RIDE), a provider of electric light-duty trucks focused on the commercial fleet market, and Hon Hai Technology Group (“Foxconn”) (TWSE: 2317), one of the largest electronics manufacturers in the world, today announced that they have entered into a definitive Asset Purchase Agreement regarding LMC’s facility in Lordstown, Ohio.
As previously disclosed, on September 30, Lordstown Motors entered into an Agreement in Principle, or AIP, with an affiliate of Hon Hai Precision Industries, also known as Foxconn, to work jointly on Lordstown Motors’ electric vehicle programs in the production and assembly plant in Lordstown, Ohio. Shortly after the AIP, and as a sign of confidence in the partnership, Foxconn purchased $50 million of common stock directly from Lordstown Motors at a price of $6.8983 per share. The definitive Asset Purchase Agreement (“APA”) implements the terms of the AIP and provides as follows:
- LMC has agreed to sell to Foxconn the Lordstown facility, excluding certain assets such as the hub motor assembly line and battery module and pack lines, for $230 million.
- Foxconn has agreed to make a down payment of the purchase price of $100 million by November 18, and subsequent down payments of $50 million on each of February 1, 2022 and no later than April 15, 2022. The balance of the purchase price will be paid at closing.
- The parties have agreed to pursue a contract manufacturing agreement for the Endurance pickup truck, which must be entered into before closing—currently targeted by April 30, 2022.
- Lordstown Motors and Foxconn will pursue a joint venture agreement to co-design and develop vehicle programs for the global commercial fleet market, using the MIH open platform. Lordstown and Foxconn would have the right to commercialize these new EV programs in North America and internationally.
- Upon the closing, Foxconn will receive 1.7 million warrants to acquire Lordstown common stock, exercisable for three years, at a price of $10.50 per share.
The closing of the transactions contemplated by the APA is subject to closing conditions, including entry into the contract manufacturing agreement, regulatory approvals and other customary closing conditions.
