31 May 2022

Skadden and Orrick advise on ECARX's $3.8bn SPAC merger with COVA Acquisition

Deal includes an additional $45m investment from Geely Holding Group, Luminar Technologies and Lotus Technology

Hangzhou, China

Skadden and Orrick are advising on Chinese autmotive tech firm ECARX’s go-public merger with special purpose acquisition company (SPAC) COVA Acquisition in a deal worth $3.82bn. 

The deal, expected to close in the fourth quarter of 2022, will see the combined company list on the Nasdaq exchange under the ticker symbol ‘ECX’. As part of the deal, ECARX will receive an additional $45m investment from strategic partners including Chinese automotive company Geely Holding Group, lidar sensor maker Luminar Technologies and automotive company Lotus Technology. 

A team from Skadden is advising ECARX, while Orrick is handling legal matters on COVA’s behalf. Skadden’s team is led by partners Peter Huang in Beijing and Shu Du in Hong Kong. New York-based partner Bruce Holdner advised on intellectual property and data matters, while partner Victor Hollender, also in New York, worked on tax matters. 

Orrick’s team is headed up by Boston capital markets partner Albert Vanderlaan and corporate partner Hari Raman in San Francisco. The team also includes US-based partners Peter Elias, Sarah Schaedler, Steven Malvey, Shannon Yavorsky, Michael Wiesner and Beijing-based partners Shelley Zhang and Jeff Zhang. 

ECARX’s existing shareholders are expected to own 89% of the combined company post-close. COVA’s board chairman and CEO Jun Hong Heng will join ECARX’s board of directors and COVA will appoint a new independent director following the transaction, the companies said. 

“COVA's leadership team has an exceptional track record backing high growth ventures, and we look forward to unlocking partnerships and paths for collaboration to accelerate development of next-generation technologies,” Shen said. 

Proceeds from the deal will be used for tech development and the rollout of new products, as well as to boost global expansion through ECARX’s existing international office in London and its product development centre in Sweden, the companies said. 

Founded in 2017, ECARX’s core product line includes infotainment head units, digital cockpits, vehicle chip-set solutions, core operating systems and integrated software stacks. The company was started by chairman and CEO Ziyu Shen and Eric Li, the company’s largest investor, who also founded and runs Geely as its chairman. 

Earlier this year, Skadden was revealed to be one of the firms advising in connection to Microsoft’s landmark $68.7bn acquisition of Activision Blizzard. The firm is advising Activision Blizzard, the Santa Monica-based gaming giant behind popular franchises including Call of Duty, Spyro, Crash Bandicoot and Tony Hawk’s Pro Skater 2. 

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