What’s new: Nio Inc. has announced that it will receive a nearly $1.1 billion investment from a fund primarily owned by the Abu Dhabi government, as the U.S. and Hong Kong-listed electric-vehicle (EV) maker fights for a bigger slice of China’s highly competitive auto market.
Shanghai-based Nio said that it has signed a share subscription agreement with CYVN Holdings LLC, which plans to pay $738.5 million in cash for about 84.7 million newly issued class A ordinary shares of the automaker for $8.72 apiece, according to a statement released Tuesday. The transaction is expected to close in early July.
Meanwhile, CYVN has inked an agreement with a Tencent Holdings Ltd. affiliate to buy about 40.1 million of Nio’s class A ordinary shares currently owned by the social media and gaming giant, according to the statement. Based on a share price of $8.72, the estimated value of the deal would be about $350 million.
Once the two transactions are complete, CYVN will hold a roughly 7% stake in Nio. CYVN will also have the right to nominate one director to Nio’s board as long as it maintains ownership of no less than 5% of the EV-maker, the statement said.
The background: Tuesday’s announcement comes at a time when Nio is facing intensifying competition in China’s crowded EV market, with many automakers vying to win over consumers by outfitting their cars with smart driving features and offering steep discounts.
Last week, Nio ended its holdout in China’s auto price war and slashed base prices on all of its cars sold in the country by 30,000 yuan ($4,200).
Contact reporter Ding Yi (yiding@caixin.com) and editors Leila Hashemi (leilahashemi@caixin.com) and Michael Bellart (michaelbellart@caixin.com)
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