CATL Withdraws! Finland "Packages" Acquisition of a Car Company and Battery Subsidiary

The Finnish government and Pontos have agreed to acquire the 20.6% stake in Valmet Automotive currently held by CATL (300750). As part of the agreement, Finland will inject approximately 35 million euros of new capital into Valmet Automotive.

On September 1, the Finnish government announced that it and Pontos agreed to acquire the 20.6% stake in Valmet Automotive, currently held by CATL (300750). As part of the agreement, Finland will inject approximately 35 million euros of new capital into Valmet Automotive.

It is reported that once the financing arrangement is completed, the government will hold 79% of Vimed Automotive's shares, and Pontos will hold 21% of the shares.

Valmet Automotive is one of the world's major car manufacturers, with teams in Finland, Germany, and Poland, serving local European car manufacturers for decades.

Notably, on September 1st, Vemed Automotive also announced that the company is reshaping its strategic layout. As the Finnish government becomes the controlling shareholder of Vemed Automotive, the company's current equity and financing arrangement includes a key initiative: its subsidiary IONCOR, which focuses on battery systems business, will become a subsidiary of the Finnish Minerals Group, a state-owned enterprise responsible for developing the Finnish battery value chain.

The Finnish government, Varma Mutual Pension Insurance Company, and Pontos will jointly acquire the shares of IONCOR held by Valmet Automotive. After the acquisition is completed, IONCOR Ltd. will become a subsidiary of the Finnish Minerals Group (a state-owned enterprise for battery value chain development). Upon the finalization of the financing arrangements, the ownership structure of IONCOR will be: Finnish Minerals Group holding 70%, Varma Mutual Pension Insurance Company holding 16%, and Pontos Group holding 14%. In addition, the Finnish government will inject approximately 20 million euros of new capital into IONCOR.

Pasi Rannus, CEO of Veimed Automotive, stated: "We are taking a new step in Veimed Automotive's 60-year development history—the company's business will officially expand beyond the automotive manufacturing sector. Within Finland's current industrial environment, our expertise in industrial mass production is uniquely advantageous, providing a solid foundation for this business expansion. This move will not only add a new pillar to the company's operations but also enhance domestic production capacity in Finland to meet the needs of the defense sector and ensure supply chain security. What pleases me especially is that these valuable industrial mass production skills will continue to remain in Finland."

The sale of IONCOR and the capital injection from the Finnish government are important steps in Valmet Automotive’s strategic transformation. Lannas further pointed out: “IONCOR is one of Europe’s leading independent automotive battery system manufacturers and a key player in the clean energy transition. Now, the company will become an integral part of Finland’s battery value chain; with the support of its new shareholders, its business development will gain even stronger momentum.”

Finland's "package" acquisition of Valmet Automotive and its battery subsidiary may impact CATL's overseas business. However, industry insiders believe that CATL can continue to deeply engage in the development of the European new energy vehicle market through battery supply and other means.

According to CATL's semi-annual report, in the first half of the year, the company's main products sold overseas were battery systems, with no significant changes compared to the same period last year. The company's overseas revenue reached 61.208 billion yuan, accounting for 34.22% of its operating income.

Meanwhile, in the first half of the year, CATL steadily advanced the construction of its global production capacity. Overseas, the company made steady progress on the Hungary plant, the joint venture plant in Spain with Stellantis, and the battery industry chain project in Indonesia.

In addition, CATL stated that there are uncertainties in the global macroeconomic environment. The company flexibly employs innovative business cooperation models to actively explore overseas markets and enhance global competitiveness. It is worth mentioning that on May 20th of this year, the company successfully went public on the Hong Kong Stock Exchange, raising a total of HKD 41 billion, establishing a platform for overseas capital operations. This will help further integrate into the global capital market, accelerate the advancement of its globalization strategy, and achieve high-quality development for the company.