Origin Materials, a manufacturer of carbon-negative products, has entered into an agreement to merge with Artius Acquisition Inc., a publicly-traded SPAC (special purpose acquisition company), in a transaction that sets the equity value of the combined entity at USD 1.8 billion.

Upon completing the transaction, the combined entity will remain listed on the Nasdaq under the ticker “ORGN.”

The transaction will provide USD 925 million in fresh capital to Origin Materials, which comprises Artius’s USD 725 million in cash held in a trust (assuming no redemptions), and private investments of USD 200 million by investors, including Danone SA, Nestlé SA, PepsiCo Inc., and affiliates of Apollo Global Management. Given effect to any shareholder redemptions, the transaction will be subjected to a minimum cash balance of USD 525 million in Artius.

Origin Materials is a producer of isolated chemicals (used to produce bio-based plastic bottles) with carbon derived from wood-based feedstock. The company partnered with Nestlé Waters and Danone in 2016 to produce and commercialize plant-based PET plastic and was later joined by PepsiCo in 2018. Origin Materials also received USD 40 million in funding in 2017 via the Nestle/Danone partnership.