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(Bloomberg) — The electric-car battery venture led by Stellantis NV and Mercedes-Benz Group AG is close to raising €4.4 billion ($4.7 billion) in debt to finance its expansion in Europe, according to people familiar with the matter.
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Automotive Cells Company SE is in talks with a series of banks and may announce a debt agreement in the coming days, the people said, declining to be identified discussing confidential information. There’s no certainty a deal will be reached.
ACC would use the cash to expand its existing factory in France and fund projects for sites in Germany and Italy, the sources said. A consortium of advertising banks such as BNP Paribas SA and state-owned lenders, along with Bpifrance, could back the debt plan, they said.
Battery factories are key to Europe’s efforts to build a local electric vehicle supply chain to compete with dominance in Asia. Automakers in the region are looking to secure a long-term supply of cells as they retool their factories to make electric vehicles.
Read more: Mercedes joins Stellantis in $8. 2 billion battery pact
Stellantis and Mercedes also plan to increase their stake in ACC by converting the stake of the company’s third-party sponsor, Saft of TotalEnergies SE, a source said.
Stellantis and ACC declined to comment. Media representatives for Mercedes and TotalEnergies did not immediately respond to requests for comment outside of general business hours.
ACC plans to invest €7 billion in the early stages of its development, according to its website. The company inaugurated its first major plant in May of last year in Douvrin, France, is building a factory in Germany’s Kaiserslautern and has plans to set up a third site in Termoli, Italy.
While the advancement of mobile factories in Europe is accelerating, the continent remains dependent on China for supply. After years of exponential expansion, the expansion of electric cars has slowed in months, stoking considerations about the trajectory of the transition.
ACC opposes Sweden’s Northvolt AB, the battery maker co-founded by former Tesla Inc executives, which has won contracts with Volkswagen AG and BMW AG.
Read more: Northvolt secures $5 billion loan to advertise electric cars in Europe
(Updates with main points about CCA plans in the seventh paragraph. )
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