Chinese owner of Lotus Technology to list a stake in US via blank cheque firm
The Chinese owner of Lotus is to list a stake in a division of the luxury sports car group in the US as part of deal with a firm backed by the world’s richest man.
China’s Geely said on Tuesday that it plans to merge electric carmaker Lotus Technology – an offshoot of the Norfolk-based sports car brand – with a special purpose acquisition vehicle (Spac) founded by L Catterton, which is backed by LVMH and its billionaire founder, Bernard Arnault.
The Nasdaq listing is expected to value the business at $5.4bn and would put Arnault head to head with Elon Musk, the world’s second-richest man and founder of the much larger electric car brand Tesla.
Lotus Technology has a plant in China and had been looking to list on the stock market since early last year.
A US listing would represent the latest high-end car listing after Porsche floated last September in the biggest European initial public offering in a decade with a $72bn valuation.
Lotus unveiled its electric sports utility vehicle Eletre last year and expects to launch a rival to Porsche’s Taycan EV this year.
Lotus Tech’s existing owner, Geely, and its partners are expected to hang on to a holding of 89.7%. Geely, which is owned by billionaire Li Shufu, also has stakes in Britain’s Aston Martin, Germany’s Mercedes-Benz and Sweden’s Volvo.
SPAC – or “blank cheque” – deals became particularly popular in the US two years ago as investors looked to deploy capital built up early in the pandemic. However, they have largely fallen out of favour since.
Geely took over Lotus in 2017 after buying a stake in Malaysia’s Proton and the Chinese group has spent about £3bn on 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 built the firm’s reputation in motorsports. Its Formula One team won seven constructors’ titles and six drivers’ titles in the 1960s and 1970s.
The listing comes at a time of intense competition in the electric car market. The rising cost of raw materials for batteries has put pressure on supply chains, meanwhile, manufacturers are competing for investment.
Earlier this month UK battery manufacturer Britishvolt collapsed into administration after failing to secure crucial investment and this week electric van maker Arrival said it was cutting half of its workforce.
LVMH combined its private equity division with Catterton in 2016. Arnault attracted attention earlier this month when he appointed his eldest daughter, Delphine, to run Christian Dior, the second-biggest brand in his £337bn luxury goods empire LVMH. He is worth an estimated $213bn compared with Elon Musk’s $181bn.