Nikola to Buy Battery Maker Romeo Power for $144 Million-Hdmoviefreedownload

Electric-truck startup

Nikola Corp.

NKLA 2.89%

said it has agreed to buy battery-technology company

Romeo Power Inc.

RMO 23.09%

in an all-stock deal that values Romeo at roughly $144 million.

Nikola said the deal would give it control over the battery-pack engineering and production processes, a critical bottleneck for electric-car makers. Romeo, which supplies batteries for Nikola’s vehicles, had earlier warned of its ability to stay afloat.

In the company’s most recent quarterly filing, issued in May, Romeo said it had “substantial doubt” regarding its ability to continue as a going concern. Romeo is one of more than two dozen companies that went public through mergers with special-purpose acquisition companies to issue so-called going-concern warnings.

Nikola said it has agreed to provide Romeo with $35 million in interim funding to facilitate continued operations until the deal closes.

The deal, expected to close by the end of October, will give Romeo shareholders 0.1186 of a share of Nikola stock for each Romeo share they own. The deal’s exchange ratio implies a consideration of 74 cents for each share of Romeo and marks a roughly 34% premium over where Romeo’s stock closed July 29.

Shares of Romeo rose almost 23% in premarket trading to 67 cents each. The stock was trading nearly 85% lower so far this year.

Nikola is currently Romeo’s largest customer, the companies said, and the deal will drive operational improvement and cost reduction in Nikola’s battery-pack production.

“With control over the essential battery-pack technologies and manufacturing process, we believe we will be able to accelerate the development of our electrification platform and better serve our customers,” Nikola Chief Executive

Mark Russell


The deal represents the latest effort by Nikola to secure its battery supply. Earlier this year, the company agreed to a multiyear pact with battery maker

Proterra Inc.

As demand for electric cars has surged in recent years, battery production has struggled to keep pace. Over the past two years, companies from

General Motors Co.

to South Korean battery maker

SK Innovation Co.

have announced more than $30 billion of investments in U.S.battery-cell makingand related efforts, according to the Center for Automotive Research.

But at the moment, Chinese companies dominate the forefront of the EV battery race, a matter that has stoked concern among lawmakers in Washington. China’s

Contemporary Amperex Technology Co.

, or CATL, and


, a Chinese company partially owned by

Warren Buffett’s

Berkshire Hathaway Inc.,

are investing heavily in new technology.

The Biden administration earlier this year invoked the Defense Production Act to boost U.S. production of the materials used in lithium-ion batteries and reduce American reliance on China. And last week, the U.S. Energy Department said it would loan a GM joint venture $2.5 billion to fund the construction of three battery-cell factories.

Last month,

Tesla Inc.

Chief Executive

Elon Musk

described lithium-ion batteries as the “new oil.”

Lithium prices are rising as demand for the key ingredient in electric car batteries grows, amid a broader push to move away from oil and gas. But extraction of the metal is time consuming and potentially harmful to the environment, and plans to produce more have prompted protests. Photo: STR/Getty Images, Oliver Bunic/AFP/Getty Images

Write to Will Feuer at [email protected]

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