Lotus Technology to Acquire 51% Equity Interest of Lotus Advance Technologies and Integrate All Business under Lotus Brand

Rhea-AI Summary

Lotus Technology (Nasdaq: LOT) announced that Geely has exercised its put option to sell its 51% equity stake in Lotus Advance Technologies to Lotus Tech. The transaction, announced on April 16, 2025, will be executed through a non-cash share exchange.

The acquisition includes Lotus UK's sportscar and hypercar manufacturing operations, along with Lotus Engineering's consultancy services. The deal's completion is expected by 2025, subject to regulatory approvals. The put option was exercisable after Lotus UK exceeded 5,000 vehicle sales in 2024.

The transaction pricing is based on 1.15x Lotus UK's 2024 revenue plus cash minus debt, with Lotus Tech issuing new shares at $10 per share as consideration. This strategic move aims to consolidate all Lotus brand operations under one entity, potentially enhancing operational synergies and brand equity.

Positive

• Consolidation of all Lotus brand operations under single control
• Acquisition includes valuable manufacturing and engineering consulting operations
• Non-cash transaction structure preserves cash resources
• Lotus UK achieved over 5,000 vehicle sales in 2024

Negative

• Share issuance will dilute existing shareholders
• Transaction subject to regulatory approval risks
• Additional operational integration costs expected

Insights

Financial Analyst

Lotus Technology's acquisition of a 51% controlling stake in Lotus UK represents a significant structural change with complex financial implications. The transaction follows the exercise of a pre-negotiated put option by Geely, triggered after Lotus UK exceeded the 5,000 vehicle sales threshold in 2024.

The all-stock transaction structure is particularly noteworthy. New shares will be issued at $10 per share, which represents a substantial 655% premium to LOT's current trading price of $1.324. This valuation disconnect raises immediate questions about potential dilution for existing shareholders. The acquisition values Lotus UK at 1.15x revenue plus cash minus debt, but without disclosing Lotus UK's revenue figures, the total deal size remains unclear.

Upon completion, LOT will consolidate Lotus UK's financials, which should strengthen its overall financial profile by incorporating the high-margin sportscar and engineering consulting businesses. This vertical integration creates operational efficiencies by bringing manufacturing capabilities in-house, potentially reducing costs and improving margins.

However, the disparity between the share issuance price and current market price suggests either a significant premium being paid or reflects terms negotiated when market conditions were different. Investors should monitor the total number of shares to be issued to properly assess the dilution impact, which remains the key financial unknown in this transaction.

Automotive Industry Expert

This acquisition represents a pivotal strategic realignment for Lotus Technology. By bringing Lotus UK's sportscar and hypercar manufacturing operations under direct control, LOT is executing a classic vertical integration play that unifies the iconic Lotus brand across all market segments.

The timing is particularly strategic, coming after Lotus UK successfully surpassed the 5,000 vehicle sales milestone in 2024. This achievement demonstrates market validation for Lotus's traditional high-performance offerings before integration, reducing operational risk.

From a brand architecture perspective, this consolidation eliminates potential market confusion by bringing all Lotus-branded vehicles under one corporate umbrella. The integration of Lotus Engineering - which provides consulting services to other OEMs - also brings valuable intellectual property and engineering expertise in-house, potentially accelerating future product development cycles.

For luxury automotive brands, fragmented ownership often creates inconsistent brand messaging and product strategies. This integration enables more cohesive brand development and potentially stronger pricing power across the portfolio. The consolidation also positions Lotus more competitively against integrated luxury performance brands like Ferrari and Porsche, where unified brand control has proven valuable for maintaining exclusivity and premium positioning.

While integration challenges exist whenever merging distinct automotive operations, the pre-existing relationship through their shared Lotus brand identity should facilitate smoother transition than typical automotive acquisitions.

NEW YORK, April 16, 2025 (GLOBE NEWSWIRE) -- Lotus Technology Inc. (“Lotus Tech” or the “Company”) (Nasdaq: LOT), a leading global intelligent and luxury mobility provider, today announced that Geely International (Hong Kong) Limited (“Geely”) exercised its put option on April 14, 2025, requiring us to purchase 51% of the equity interests in Lotus Advance Technologies Sdn Bhd (“Lotus UK”) held by Geely pursuant to the Put Option Agreement dated January 31, 2023 between the parties.

Lotus UK controls the manufacturing operations for Lotus’ sportscars and hyper cars, and Lotus Engineering which provides comprehensive consultancy services to many of the OEMs and Tier 1 suppliers around the world.

Pursuant to the exercise of put option from Geely, the Company expects to acquire 51% of the equity interest in Lotus UK through a non-cash transaction based on a pre-agreed pricing method¹. Upon completion, the Company will gain control over Lotus UK and consolidate its financial results. The strategic transaction will enable the Company to integrate all businesses under Lotus brand.

The acquisition is expected to be completed by 2025, subject to potential regulatory approvals.

In conjunction with the business combination between the Company and L Catterton Asia Acquisition Corp, a special purpose acquisition company affiliated with L Catterton, a leading global consumer-focused investment firm, the Company and Lotus UK entered into a Put Option Agreement with each of Geely and Etika. Pursuant to these agreements, each of Geely and Etika was granted the right to require the Company to acquire its equity interest in Lotus UK at a pre-agreed pricing method¹ and upon satisfaction of the condition (“Put Option Exercise Condition”) that the total number of vehicles sold by Lotus UK and its subsidiaries shall exceed 5,000 in 2024, with the exercise of such options by Geely and Etika not cross-conditioned on one another. As of December 31, 2024, the Put Option Exercise Condition had been satisfied.

Mr. Qingfeng Feng, Chief Executive Officers, said: "This acquisition marks a critical milestone in our strategic journey to fully integrate all businesses under the Lotus brand, which will strengthen brand equity and enhance our operational flexibility and internal synergies. We are confident that the transaction will create substantial long-term value for our shareholders.”

Note 1: Pursuant to the agreement, the Company will issue new shares valued at $10 per share in consideration of Geely and Etika’s transfer of Lotus UK shares. Lotus UK is valued at 1.15 multiples revenue plus cash minus debt of LGIL, based on LGIL’s audited consolidated annual financial report of 2024.

About Lotus Technology Inc.
Lotus Technology Inc. has operations across the UK, the EU and China. The Company is dedicated to delivering luxury lifestyle battery electric vehicles, with a focus on world-class R&D in next-generation automobility technologies such as electrification, digitalisation and more. For more information about Lotus Technology Inc., please visit www.group-lotus.com.

Forward-Looking Statements
This press release contains statements that may constitute “forward-looking” statements pursuant to the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may”, “should”, “expect”, “intend”, “will”, “estimate”, “anticipate”, “believe”, “predict”, “potential”, “forecast”, “plan”, “seek”, “future”, “propose” or “continue”, or the negatives of these terms or variations of them or similar terminology although not all forward-looking statements contain such terminology. Forward-looking statements involve inherent risks and uncertainties, including those identified under the heading “Risk Factors” in the Company’s filings with the U.S. Securities and Exchange Commission. All information provided in this press release is as of the date of this press release, and Lotus Tech undertakes no obligation to update any forward-looking statement, except as required under applicable law.

Contact Information
For investor inquiries
ir@group-lotus.com

FAQ

What is the structure of Lotus Technology's acquisition of Lotus Advance Technologies?

Lotus Tech will acquire 51% of Lotus Advance Technologies through a non-cash transaction, issuing new shares at $10 per share based on 1.15x Lotus UK's 2024 revenue plus cash minus debt.

When will Lotus Technology (LOT) complete the acquisition of Lotus UK?

The acquisition is expected to be completed by 2025, subject to regulatory approvals.

What assets will Lotus Technology gain from the Lotus UK acquisition?

Lotus Tech will gain control of Lotus UK's sportscar and hypercar manufacturing operations, plus Lotus Engineering's consultancy services to OEMs and Tier 1 suppliers.

What was the sales threshold requirement for the LOT acquisition put option?

The put option required Lotus UK and its subsidiaries to exceed 5,000 vehicle sales in 2024, which was achieved.