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The logo of U.S. motorcycle company Harley-Davidson on one of their models at a shop in Paris, on Aug. 16, 2018..Philippe Wojazer/Reuters

Harley-Davidson Inc’s electric-motorcycle division LiveWire will go public through a merger with a blank-check firm in a deal valuing it at $1.77-billion, the company said on Monday, as the 118-year old brand turns to younger customers to boost volumes.

The deal with AEA-Bridges Impact Corp will be funded by the blank-check company’s $400-million cash held in trust and another $100-million investment each from Harley and KYMCO.

Harley is the latest to cash in on an uptick in valuations of electric vehicles. Last month, Amazon-backed EV maker Rivian shot past a valuation of $100-billion in its market debut after one of the world’s mammoth initial public offerings in 2021, surpassing Ford and General Motors.

Several other prominent players in the sector have also merged with special purpose acquisition companies (SPACs) to go public.

A broader awareness about climate change is paving way for automakers to lean towards greener vehicles in a sector Tesla reigns supreme. Valuations have gained as money managers also increasingly factor in ESG policies in their investments.

Harley’s shares rose 11.3 per cent in premarket trading, while those of AEA-Bridges were up 3.4 per cent.

Jochen Zeitz, Harley’s chief executive, will be the chairman of LiveWire for up to two years following the completion of the deal.

Harley-Davidson will retain an equity interest in the company of about 74 per cent and ABIC’s shareholders will own about 17 per cent.

LiveWire is expected to be listed on the New York Stock Exchange under the symbol “LVW.”

Earlier this year, Harley launched its first electric bike from its LiveWire brand priced at $22,000, in a move aimed at younger and more environmentally conscious riders who could eventually lift Harley’s volumes as its core baby boomer audience grows old.

Waning interest in motorcycling as a recreational activity as well as the price of Harley bikes, which can cost as much as a car, have hurt the company’s efforts to woo younger riders.

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