(Reuters) -Stellantis NV said on Thursday it would invest 1.5 billion euros ($1.58 billion) to acquire approximately 20% of Chinese electric vehicle (EV) maker Zhejiang Leapmotor Technology.

Leapmotor said in a separate statement that it would issue 194.3 million Hong Kong shares to Stellantis for HK$43.8 per share, a premium of 19% to its last close of HK$36.80.

After the subscription, Stellantis will own about 21.07% of Zhejiang Leapmotor's total issued Hong Kong shares.

EV maker Leapmotor also announced the formation of a joint venture with Stellantis, in which the Chrysler parent will own a 51% stake giving it exclusive rights for the export and sale, as well as manufacturing, of Leapmotor products outside Greater China.

"Through this strategic investment, we can address a white space in our business model and benefit from Leapmotor's competitiveness both in China and abroad," Stellantis CEO Carlos Tavares said.

Stellantis, whose brands include Fiat and Peugeot, has a very small presence in China, the world's largest auto market.

The group and rivals such as Renault are concerned about growing competition from cheap Chinese electric cars in Europe.

Stellantis is scheduled to publish its third-quarter revenue figures next Tuesday.

The group last year closed its joint venture that makes Jeeps in China with local partner Guangzhou Automobile Group amid disappointing results.

($1 = 0.9466 euros)

(Reporting by Sameer Manekar and Kanjyik Ghosh in Bengaluru; Editing by Devika Syamnath and Subhranshu Sahu)