China's Chijet to merge with new SPAC at lower valuation than prior deal

Raindrops hang on a sign for Wall Street outside the New York Stock Exchange in Manhattan in New York City, New York, U.S., October 26, 2020. REUTERS/Mike Segar/File Photo

Oct 26 (Reuters) - Chijet Motor Co on Wednesday agreed to go public in the United States through a merger with a blank-check company that gave the China-based automaker a 37% lesser valuation than what it had secured in another deal that was terminated.

The deal with special purpose acquisition company (SPAC) Jupiter Wellness Acquisition Corp (JWAC.O) values Chijet at $1.6 billion, less than a month after Deep Medicine Acquisition Corp (DMAQ.O) called off its $2.55 billion deal.

Before calling off the deal with the automaker, Deep Medicine had twice extended the due diligence period.

Chijet expects to receive proceeds of nearly $140.2 million, assuming the SPAC's shareholders do not pull their money out of the acquisition vehicle. It will be listed on the Nasdaq.

The company develops both fuel-powered and electric vehicles for China and other Southeast Asian markets. It will use the capital raised through the merger to develop its EV manufacturing capabilities.

SPACs are firms with no business operations which merge with a private company to take it public.

Reporting by Niket Nishant in Bengaluru; Editing by Sriraj Kalluvila and Arun Koyyur

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