Lotus Technology’s Chinese owners go public with blank check company in US | Auto Sector

Lotus’ Chinese owner is to list its stake in a unit of the US luxury sports car group as part of a deal with a company backed by the world’s richest man.

China’s Geely Automobile said on Tuesday it plans to merge electric carmaker Lotus Technology – an offshoot of the Norfolk-based sports car brand – with the Special Purpose Acquisition Company (Spac), founded by L Catterton and acquired by LVMH and Backed by its billionaire founder, Bernard Arnault.

The Nasdaq listing is expected to value the business at $5.4 billion and will pit Arnault head-to-head with Elon Musk, the world’s second-richest man and leader of the larger electric car brand Tesla. founder of Sla.

Lotus Technology, which has a factory in China, has been seeking a stock market listing since early last year.

The U.S. listing would represent the latest high-end car to hit the market, following Porsche’s biggest initial public offering in Europe in a decade last September at a $72 billion valuation.

Lotus launched the Eletre electric sport utility vehicle last year and expects to launch a Porsche Taycan EV rival this year.

Geely, Lotus Tech’s current owner, and its partners are expected to retain an 89.7 percent stake. Geely, owned by billionaire Li Shufu, also owns stakes in Britain’s Aston Martin, Germany’s Mercedes-Benz and Sweden’s Volvo.

SPAC (or “blank check”) deals became especially popular in the U.S. two years ago, as investors looked to deploy capital accumulated early in the pandemic. However, they have largely fallen out of favor since then.

Geely took over Lotus in 2017 after buying a stake in Malaysia’s Proton, and the Chinese group has spent around £3bn revamping its brand and investing in new models and production.

The first Lotus car was built in 1948 by University of London student Colin Chapman, who established the company’s reputation in motorsport. Its Formula 1 team won seven constructors’ titles and six drivers’ titles in the 1960s and 1970s.

The listing comes amid fierce competition in the electric vehicle market. The rising cost of battery raw materials has put pressure on the supply chain, while manufacturers are racing to invest.

Earlier this month, British battery maker Britishvolt fell into administration after failing to secure key investment, and this week electric van maker Arrival said it would cut half its workforce.

LVMH merged its private equity arm with Catterton in 2016. Arnault drew attention earlier this month when he appointed his eldest daughter, Delphine, to helm Christian Dior, the second-biggest house in his £337bn luxury goods empire LVMH. He is worth an estimated $213 billion compared to Elon Musk’s $181 billion.

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