- Lotus Technology is merging with a SPAC (Special Purpose Acquisition Company) to go public, rather than doing it through an IPO.
- China’s Zhejiang Geely Holding Group Co. is expected to retain majority ownership after the merger, but the black-check company its merging Lotus Technology with will help bankroll its EV rollout over the coming years.
- Lotus unveiled its first production electric model, the Eletre crossover, last year.
- The company also plans to launch a rival to the Porsche Taycan and Tesla Model S this year.
Lotus is making some waves as it prepares to go public.
Chinese multinational Zhejiang Geely Holding Group Co. announced its intent to merge with special purpose acquisition company L Catterton Asia Acquisition Corp. Tuesday, aiming to take Lotus’ electric-car making subsidiary public.
Lotus Technology is spearheading the launch of the Eletre crossover, as well as the brand’s other upcoming EVs. Rather than go public through an initial public offering like Rivian or Porsche, Geely instead joined up with this special purpose acquisition company (SPAC). The SPAC has ties to Bernard Arnault, whom last month became the world’s richest man, surpassing Elon Musk to claim the title. Hot on the heels of Porsche’s successful IPO, the transaction combining the two entities is worth about $5.4 billion, according to recent reports.
Now, reports also note the connection to Arnault is not a direct one. Instead, his European LMVH multinational combined with another entity whose sponsorship includes the SPAC that’s merging with Lotus Technology. With the added resources, Group Lotus aims to get the jump on electric sports cars, against far larger rivals like Ferrari and Aston Martin. It may also gain some market share against established electric rivals, like Tesla and Porsche, though Lotus’ footprint is significantly smaller at the moment.
With the merger, Geely and Lotus’ other owners will still maintain an 89.7% stake in the combined company after the SPAC merger. The Chinese automaker also controls Volvo Cars and its billionaire owner, Li Shufu, holds an interest in Germany’s Mercedes-Benz Group AG and the UK’s Aston Martin Lagonda Global Holdings Plc.
Volvo’s performance subsidiary Polestar went public through a similar mechanism last year. It combined with SPAC Gores Guggenheim, Inc. and started trading on the Nasdaq exchange on June 24, 2022.
