Lotus going public via SPAC at $5.4bn valuation

A blank cheque firm affiliated with Bernard Arnault, the world’s richest man, reached a deal to take a potential challenger to No 2 billionaire Elon Musk onto the public markets.

Lotus Technology, the electric-car maker owned by China’s Geely, said on Tuesday it has agreed to merge with L Catterton Asia Acquisition in a transaction that values the combined entity at about $5.4bn (roughly R93,989,430,000). The private equity operations of Arnault’s luxury-goods powerhouse LVMH combined with the US investment firm Catterton in 2016.

Lotus Tech is a subsidiary of the British car-making group Geely acquired in 2017. While Group Lotus is tiny compared to Tesla, it’s been steering away from combustion engines and has several all-electric models planned for the coming years.

Arnault overtook Musk as the world’s richest man last month, the first time a European claimed the top spot on the Bloomberg Billionaires Index. LVMH is a passive minority investor in L Catterton, according to a spokesperson.

Lotus Tech has been looking to go public since at least early last year. Management may have been encouraged by another luxury auto brand’s recent listing. Porsche pulled off Europe’s largest initial public offering in a decade when it debuted in Frankfurt in September. A week later, Porsche overtook Volkswagen as Europe’s most valuable carmaker.

Geely and other owners are expected to retain an 89.7% shareholding in Lotus Tech after the SPAC merger. Geely’s billionaire owner Li Shufu also controls Swedish carmaker Volvo and owns stakes in Germany’s Mercedes-Benz and the UK’s Aston Martin.

Lotus unveiled its all-electric Eletre sport utility vehicle last year and plans to launch a rival to Porsche’s popular Taycan EV in 2023. Lotus Cars delivered only 1,710 vehicles in 2021, according to the most recent data available. Tesla, by comparison, delivered around 1.31-million vehicles last year.

Deutsche Bank AG advised Lotus Tech on the deal, while Credit Suisse Group AG acted as capital markets adviser to the SPAC.

- With assistance from Siddharth Philip.

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