The Lotus EV division will go public as part of the $5.4 billion SPAC deal.

Lotus Technology, the EV development arm of Lotus, is about to go public through a SPAC deal.

Also known as a reverse merger, a SPAC deal, in which an unlisted company seeks to go public by being acquired by a company that is already listed, is usually formed solely for this purpose and is known to investors as a special purpose acquisition company (SPAC). Its advantage is that it avoids the complexity (i.e., regulatory requirements) of launching an IPO.

In an announcement Tuesday, Lotus Technology said it plans to merge with L Catterton Asia Acquisition Corp, a Nasdaq-listed SPAC company, for a combined enterprise value of $5.4 billion. Shares of the merged company will be listed on NASDAQ under the ticker symbol "LOT."

Lotus Technology said it plans to use the proceeds from the transaction to develop vehicles and expand its global sales network. No mention was made of the timing of the transaction.

Lotus Technology is based in Wuhan, China, and is the division responsible for the Lotus Elettre electric SUV. It is also developing two other Lotus EVs, a sedan and another SUV. The division is headed by Feng Qingfeng, who will remain as CEO after the merger. Lotus electric sports cars like the hypercar Evija are for now still being developed by Lotus at its headquarters in Hethel, U.K. Etika is a Malaysian supplier and, together with Geely, is a major shareholder in Lotus Technology, Lotus' parent company. nio Capital is an investment firm founded by William Li, CEO of rival EV company Nio.

The acquisition of Lotus Technology is not the first for a Geely-owned company in recent years. Other recently listed companies owned or controlled by Geely include Volvo and Polestar. Another Geely company, EV startup Zeekr, is also rumored to be seeking to go public.