Under the agreement, United Wholesale will retain about 94% ownership of the combined company and will get about $425 million in cash held in Gores's trust account along with $500 million from a private placement.

Once the deal is completed, the combined company will be listed on Nasdaq and named UWM Corp, the Michigan-based company said, adding that the deal would make UWM the largest SPAC transaction so far.

United Wholesale's current Chief Executive Officer Mat Ishbia will continue to lead the business with the existing management team.

Gores Holdings IV, which went public at the beginning of this year, had raised $425 million from the offering.

The deal comes a month after Gores' other SPAC, Gores Metropoulos Inc, merged with autonomous vehicle sensor firm Luminar with plans to go public in the fourth quarter.

SPACs, also known as blank-check firms, are shell companies that raise funds through an initial public offering (IPO), with an intention to acquire a private company.

High-profile investors such as Bill Ackman and Michael Klein have raised billions through their SPACs in 2020 as the vehicle becomes an increasingly popular route to the public markets over a traditional IPO.

By Krystal Hu and Maria Ponnezhath