Archer has announced an agreement in principle on key terms for its contract manufacturing relationship with Stellantis. Building on the nearly US$300 million Stellantis has already invested, including US$55 million in July 2024, the company plans to fund additional costs to support Archer's manufacturing goals.
Stellantis will finance up to approximately US$370 million of the expected manufacturing labour costs required for Archer's planned ramp-up to producing 650 aircraft annually. In return, the company will receive Archer shares on a quarterly basis, calculated based on the labour costs incurred and Archer's future stock price. Additionally, Stellantis will contribute up to US$20 million towards initial manufacturing capital expenditures for the production ramp of the Midnight aircraft.
Archer aims to align Stellantis's incentives with its own production and cost objectives. To this end, Archer plans to issue Stellantis US$30 million in performance warrants, which will vest as Stellantis meets certain milestones under the contract. Any equity issued to Stellantis as part of this agreement is expected to be subject to approval by Archer's shareholders.
This agreement is part of a broader funding strategy, which includes the US$55 million the company received from Stellantis on July 1, 2024, as well as an additional US$175 million investment from institutional and strategic investors, including Stellantis and United Airlines. The newly secured funds will be used for working capital and general corporate purposes. Moelis & Company LLC acted as the exclusive placement agent for Archer in this investment round.
Headquartered in the Netherlands, Stellantis N.V. is a leading global automaker, recognised for its diverse portfolio of iconic brands such as Jeep, Chrysler, and Peugeot. The company is committed to becoming a carbon net-zero mobility tech company by 2038 as part of its Dare Forward 2030 strategic plan.
