Evergrande Auto Unit Is Selling Protean to EV Maker Bedeo

(Bloomberg) -- E-mobility company Bedeo has agreed to buy U.K. startup Protean Electric from China Evergrande Group’s automotive unit.

The divestment by China Evergrande New Energy Vehicle Group Ltd. was announced in a Thursday statement from Bedeo that confirmed an earlier Bloomberg News report.

The deal helps Europe-focused Bedeo, which supplies light commercial vehicles and technology for zero emissions transport, expand into Asia and the U.S. Financial terms were not disclosed.

Protean makes in-wheel motor technology used in electric cars, self-driving vehicles and commercial vans. The company has about 150 employees spread between the U.K., China and the U.S. and has been issued more than 200 patents. It’s led by Chief Executive Officer Andrew Whitehead, a former designer of Formula One racing engines for Honda Motor Co., its website shows. 

Shares in Evergrande NEV, which has a market value of about HK$35 billion ($4.5 billion), rose as much as 3.1% in Hong Kong trading on Thursday.

Evergrande bought Protean in 2019 for $58 million, part of a series of deals made by the Chinese property developer as it pushed into electric vehicles, according to its annual report that year. It spent billions of dollars on such acquisitions, including the takeover of remnants salvaged from the bankrupt Saab Automobile. 

Green Push

The Chinese group still has yet to deliver a single vehicle, despite billionaire founder Hui Ka Yan’s ambitions to take on industry giants like Tesla Inc. More recently, Evergrande is trying to shed assets in a bid to avert default as it grapples with more than $300 billion of liabilities. It’s been seeking a buyer for its property management arm and sold off holdings in other companies including a Chinese bank.

Bedeo, founded by Turkish engineer Osman Boyner, has developed powertrains for electric automobiles and is seeking to expand the use of its technology in the marine and aviation sectors. In 2019, it signed a contract to supply drivetrain solutions to light commercial vehicles made by PSA Group, now known as Stellantis NV, according to its website. It has also worked with customers including express delivery company FedEx Corp. and British online grocer Ocado Group Plc. 

The London-based firm received a growth capital investment from Ludgate Investments Ltd., a European sustainability focused investment manager, in April.

“Protean is the first acquisition under Bedeo’s expansive growth strategy,” Boyner said in a statement. “The company retains a strong balance sheet and continues to explore attractive strategic and synergic acquisition opportunities in the electrification space.”

Investors’ imagination has been captured by the boom in electric vehicles, with Tesla’s market valuation surging past $1 trillion this year and a slew of fresh challengers securing listings via blank-check companies. Rivian Automotive Inc., an electric truck maker backed by Amazon.com Inc., is seeking to raise as much as $8.4 billion in a U.S. initial public offering and has attracted commitments from cornerstone buyers including Blackstone Inc. 

Other industries are also attempting to capitalize on the shift to greener autos. This week, the chemicals group DuPont Inc. announced it would buy engineering materials maker Rogers Corp. for about $5.2 billion to tap into the rapid growth of electric vehicles and advanced auto electronics.

The call to move beyond fossil fuels has become more urgent as global leaders gather in Glasgow, Scotland, for climate talks this week. A number of top polluting countries vowed to zero out their carbon emissions in the coming decades, and finance industry executives have pledged to support the transition to a greener economy.

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