Nov 7 (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 ( CAEP ), in a deal valuing the combined company at $1.75

billion.

The special purpose acquisition deal comes as this

unconventional route to the public markets has regained

popularity in the United States after years of subdued activity,

following poor share performance and regulatory roadblocks.

A SPAC is a shell firm that raises money through an IPO to

merge with a private business and take it public, offering

companies an alternative route to the market bypassing the

longer and costlier traditional IPO process.

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 third-party partners,

supporting more than 90 markets globally with established

distribution networks, the company said.

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,

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.

American financial services firm Cantor Fitzgerald is the

backer of the SPAC taking AIR public.

A total of 116 SPACs have completed initial public offerings

so far this year, according to SPAC Research, compared with 57

in 2024.

The companies expect the deal to close in the first half of

2026, after which the combined entity, AIR Global Limited, will

trade on the Nasdaq under the "AIIR" ticker symbol.