Lotus Technology, a division of Lotus responsible for developing electric vehicles, is about to go public via a SPAC deal.
In a SPAC deal, also known as a reverse merger, a private company goes public by being acquired by an already publicly traded company, usually formed solely for this purpose and known in investor circles as a Special Purpose Acquisition Company (SPAC). is known. . The benefit is that it avoids the complexity (particularly regulatory requirements) of launching an IPO.
In an announcement Tuesday, Lotus Technology said it was planning a reverse merger with Nasdaq-listed SPAC company L Catterton Asia Acquisition Corp. The combined company’s shares would also be listed on the Nasdaq under the ticker symbol “LOT”.
Lotus Technology said it plans to use the money it raises from the deal to fund vehicle development and expand its global distribution network. A date for the deal was not given.
Based in Wuhan, China, Lotus Technology is the business unit responsible for the electric SUV Lotus Eletre. It is also developing two other Lotus EVs, a sedan and another SUV. It will be headed by Feng Qingfeng, who will remain CEO after the merger. Lotus electric sports cars, such as the hypercar Evija, will initially be developed by Lotus at its headquarters in Hethel, UK
Lotus Technology’s existing shareholders are Geely, Etika Automotive and Nio Capital, and they will continue to own 89.7% of the company after the transaction closes. Etika is a Malaysian operator that, along with Geely, is the major shareholder in Lotus Technology’s parent company, Lotus. Nio Capital is an investment firm founded by William Li, the CEO of rival EV firm Nio.
The deal with Lotus Technology won’t be the first for a Geely-owned company in recent years. Other companies owned or controlled by Geely that have recently gone public are Volvo and Polestar. Another Geely company, EV startup Zeekr, is also set to go public.