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UPDATE 1-Archer to go public, United Airlines invests and orders electric aircraft

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(Adds details of United order, background, analyst comment)

By Tracy Rucinski and Niket Nishant

Feb 10 (Reuters) - Electric aircraft startup Archer will gopublic through a merger with a blank-check company backed in adeal valued at around $3.8 billion and backed by an order andinvestment from United Airlines, among the first major airlinesto commit to the purchase of air taxis.

The deal with Atlas Crest Investment Corp,announced on Wednesday, is expected to provide $1.1 billion tothe company which makes electric aircraft with vertical take-offand landing.

Archer and Atlas Crest said the proceeds include a $600million private investment from United Airlines Holdings Inc, Stellantis, investment banker Ken Moelis andMubadala Capital, the investment arm of Abu Dhabi's stateinvestor Mubadala Investment Co.

The deal is the latest in an increasingly crowded marketdominated mostly by aerospace companies and tech start-upstrying to cash in on industry efforts to reduce carbonemissions.

Archer said it had an order from United Airlines worth $1billion and an option for an additional $500 million ofaircraft.

United said separately that it was teaming up with regionalcarrier Mesa Airlines to buy 200 Archer eVTOL aircraftthat would take people from cities to airports within the nextfive years.

"Given that the entire electric aircraft market is in itsinfancy, needless to say it will take time to refine the productand get the regulatory approvals," Raymond James analysts said.

Palo Alto-based Archer was launched in May last year and isbacked by Marc Lore, former chief executive officer of WalmarteCommerce U.S. The company said it is developing an electricaircraft that can travel up to 60 miles at 150 miles per hour.

A blank-check company, or a special purpose acquisitioncompany (SPAC), is a shell company that uses capital raisedthrough an initial public offering to buy a private firm,thereby taking it public. They have gained popularity as analternative to public markets for companies seeking to avoid atraditional IPO.

Moelis-led Atlas Crest raised $500 million in its IPO inOctober. The veteran banker founded investment firm Moelis & Coin 2007, since when it has advised on more than $3.5trillion worth of transactions. Moelis also served as thepresident of UBS Investment Bank.(Reporting by Niket Nishant and Tracy Rucinski; Editing by MajuSamuel and David Gregorio)