Nikola can complete its deal to acquire Romeo Power after clearing key hurdle

Electric heavy truck maker Nikola said Thursday that its planned acquisition of battery-pack maker Romeo Power will now proceed, after Romeo Power shareholders agreed to tender just over half of the company’s outstanding shares.

In August, Nikola said it had agreed to acquire Romeo Power, a California-based maker of battery modules that has been struggling financially, for $144 million in stock. But the deal was contingent on a tender offer to Romeo shareholders: Investors had to “tender,” or exchange, at least half of Romeo’s shares outstanding by midnight Wednesday for the deal to proceed.

Nikola said that 93.16 million Romeo shares, representing about 50.1% of the company’s total shares outstanding, had been tendered by the deadline – just enough to complete the deal.

The remaining shares of Romeo Power will now be “canceled and converted” to shares of Nikola, with Romeo shareholders receiving 0.1186 of a Nikola share for each share of Romeo they hold, Nikola said.

Romeo Power specializes in building battery modules and packs for large electric commercial vehicles, using lithium-ion battery cells made by other companies. Nikola, which expects to ship between 300 and 500 of its electric semitrucks by year-end, is Romeo’s largest customer.

Nikola said in August that it had agreed to provide Romeo with $35 million in interim funding to continue its operations until the merger is completed. The truck maker has said that bringing Romeo’s operations in-house could save it up to $350 million over the next four years.

Shares of the company closed up about 3.3% on Thursday.

Nikola will report its third-quarter results before the U.S. markets open on Nov. 3.