Lotus Technology, a division of Lotus responsible for EV development, is about to go public via a SPAC deal.

Also referred to as a reverse merger, a SPAC deal is where a private company goes public by being taken over by a company that's already listed, typically one set up solely for this purpose, known in investor circles as a special purpose acquisition company (SPAC). The advantage is that it avoids the complexity (namely regulatory requirements) of launching an IPO.

In an announcement on Tuesday, Lotus Technology said it plans a reverse merger with the Nasdaq-listed SPAC company L Catterton Asia Acquisition Corp in a deal that will value the combined entity at $5.4 billion. Shares of the combined entity would also be listed on the Nasdaq, under the ticker symbol “LOT.”

Lotus Technology said it plans to use the money it raises from the deal to fund vehicle development and expand its global distribution network. Timing for the deal wasn't mentioned.

Lotus Technology is based in Wuhan, China, and is the division responsible for the Lotus Eletre electric SUV. It's also developing two other Lotus EVs, a sedan and another SUV. It is headed by Feng Qingfeng, who will remain as CEO after the merger. Electric sports cars from Lotus, like the Evija hypercar, for now are still being developed by Lotus at its headquarters in Hethel, U.K.

Lotus Technology's existing shareholders are Geely, Etika Automotive, and Nio Capital, and they will continue to own 89.7% of the company after the deal closes. Etika is a Malaysian supplier which together with Geely are the primary shareholders of Lotus Technology's Lotus parent. Nio Capital is an investment firm founded by William Li, the CEO of rival EV firm Nio.

The Lotus Technology deal won't be the first for a Geely-owned company in recent years. Other Geely owned or controlled companies that have gone public recently include Volvo and Polestar. Another Geely company, EV startup Zeekr, is also rumored to be looking to go public.