In a significant move within the sustainability sector, Athena Technology Acquisition Corp. II ("Athena") has announced its intention to merge with Ace Green Recycling, Inc. ("Ace Green") under a Business Combination Agreement dated December 4, 2024. This merger, which is set to conclude in early 2025, will see Athena's wholly-owned subsidiary, Project Atlas Merger Sub Inc. ("Merger Sub"), merge with Ace Green, making Ace Green the surviving entity and a wholly owned subsidiary of Athena. Following the merger's completion, Athena will be renamed as "New Ace Green Recycling, Inc."
The deal is valued at approximately $250 million, with the financial mechanics involving the cancellation of Ace Green's existing common stock in exchange for shares of Athena's Class A common stock. The precise exchange ratio will be calculated based on the number of outstanding shares of Ace Green, with each share yielding a pro rata share of any Earnout Shares and a number of shares of Athena Class A common stock equivalent to the quotient of $250 million divided by $10.10, divided by the number of shares of Ace Green outstanding. Additionally, Ace Green's stockholders and holders of restricted stock units (RSUs) and options will be eligible to receive up to 10.5 million Earnout Shares based on future performance metrics.
Strategically, this merger aligns with Athena's goal of creating a robust entity in the recycling market, which is increasingly vital as companies and governments seek sustainable solutions. By merging with Ace Green, Athena enhances its portfolio with innovative recycling technologies and operational efficiencies, potentially positioning itself as a leader in the sector.
The special meeting for Athena's stockholders to vote on the merger will take place via a live video webcast, with further details to be provided. The transaction is anticipated to close shortly after the registration statement becomes effective, which is expected to be within the first quarter of 2025. Following the merger, New Ace Green plans to list its shares on the Nasdaq Stock Market, further enhancing its visibility and access to capital markets.
This merger represents not only a strategic repositioning for Athena but also potentially impacts its shareholders, employees, and the broader market. Shareholders may benefit from increased stock liquidity and potential appreciation as New Ace Green capitalizes on the growing demand for recycling solutions. For employees, the merger could usher in opportunities for growth and innovation as the new entity pursues expansion.
Regulatory approval will be a critical step in this process, with antitrust considerations likely to be reviewed by the appropriate authorities to ensure compliance with relevant laws. Overall, this merger signifies a critical step for both companies as they aim to leverage their combined strengths in a rapidly evolving industry.