The Nasdaq logo is displayed at the Nasdaq stock market site in New York City, U.S., July 16, 2025. REUTERS/Kylie Cooper

By Manya Saini

(Reuters) -Dubai's AIR, the owner of hookah brand Al Fakher, said on Friday it had agreed to go public in the U.S. through a merger with blank-check firm Cantor Equity Partners III, in a deal valuing the combined company at $1.75 billion.

The deal with the Cantor Fitzgerald-backed special purpose acquisition company comes as this unconventional route to the public markets has regained popularity in the U.S. after years of subdued activity, following poor share performance and regulatory roadblocks.

"One of the reasons for the uptick in new SPACs has been an improved macroeconomic environment, particularly the decline in interest rates, which has made it easier for companies to access capital through faster routes like SPACs," said IPOX research associate Lukas Muehlbauer.

"The broadly positive post-merger aftermarket this year is also showing that SPAC deals are shaking off the image of being overly risky."

A SPAC is a shell firm that raises money through an IPO to merge with a private business and take it public, providing a quicker route to market than a traditional IPO.

Dubai-based AIR said it generated $375 million in revenue and $150 million in adjusted earnings before interest, taxes, depreciation, and amortization for its core products in 2024.

It has eight production facilities across the United Arab Emirates, the European Union and with third-party partners.

Al Fakher, its most valuable business, makes flavored hookah and had 14 million consumers worldwide as of 2024.

Hookah use has grown in the U.S. in recent years as lounges and cafes offering flavored smoking become more common and are frequented by younger consumers in urban areas.

While the product is often marketed as a social or cultural activity, U.S. health agencies continue to warn that hookah smoke contains many of the same harmful chemicals found in cigarettes.

The deal is expected to close in the first half of 2026. The combined entity, AIR Global Limited, will trade on the Nasdaq under the "AIIR" ticker symbol.

(Reporting by Pooja Desai)