Hong Kong biotech company Prenetics is set to merge with Artisan Acquisition, a special purpose acquisition company, in a deal that will value the new entity at $1.3 billion or more, according to a source close to the deal.

The transaction is expected to close by the end of this year. The SPAC is already traded on the Nasdaq under the ticker ARTAU.

SPACs are shell companies set up to raise money through an initial public offering — their sole purpose is to merge with or acquire an existing private company and to take it public. They bypass Wall Street's traditional IPO process.

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