(Bloomberg) -- Lotus Technology, the electric-car maker owned by China’s Zhejiang Geely Holding Group Co., agreed to merge with a blank-check company in a transaction that values the combined entity at about $5.4 billion.

L Catterton Asia Acquisition Corp. will combine with the EV making subsidiary of the British carmaking group that Geely acquired back in 2017, the two said in a statement Tuesday. The special purpose acquisition company’s sponsor has ties to Bernard Arnault, the world’s richest man.

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 AG pulled off Europe’s largest initial public offering in a decade when it debuted in Frankfurt in September. A week later, Porsche overtook Volkswagen AG as Europe’s most valuable automaker.

Rather than go the IPO route, Lotus Tech will merge with a SPAC whose sponsor combined with the private equity operations of Arnault’s luxury-goods powerhouse LVMH in 2016. LVMH is a passive minority investor in L Catterton, according to a spokeswoman.

Arnault overtook Tesla Inc. Chief Executive Officer Elon Musk as the world’s richest man last month — the first time a European claimed the top spot on the Bloomberg Billionaires Index.

While Group Lotus is tiny compared to Tesla, Geely has been steering it away from combustion engines and has several all-electric models planned for the coming years. Lotus Tech sees itself as a competitor to the likes of Ferrari and Aston Martin, and will get a jump on the first electric models from those brands.

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.

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 Car AB and owns stakes in Germany’s Mercedes-Benz Group AG and the UK’s Aston Martin Lagonda Global Holdings Plc.

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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