May 11 (Reuters) - Renewable fuel services firm H2B2 Electrolysis Technologies Inc will go public in a $750 million merger deal with blank-check firm RMG Acquisition Corp III , the companies said on Thursday.

H2B2, which operates in the green hydrogen sector that has attracted large investments in recent years, is primarily focused on the U.S. and European markets.

The company said the deal, expected to close in the second half of 2023, would help it execute its near-term project pipeline and allow it to scale up operations.

A special-purpose acquisition company, or SPAC, is a publicly listed shell firm that raises funds with the intention of merging with a private company within two years of floating its shares, taking the private firm public.

The SPAC sector has seen a downtrend since last year after several deals were scrapped as market turbulence due to inflation and rising interest rates spooked startups looking to go public.

(Reporting by Sourasis Bose in Bengaluru Editing by Vinay Dwivedi)