Nikola Corporation (NasdaqGS:NKLA) entered into a definitive agreement to acquire Romeo Power, Inc. (NYSE:RMO) from a group of shareholders for approximately $150 million on July 30, 2022. Under the terms of the agreement, Nikola will commence an exchange offer to acquire all of the outstanding shares of Romeo common stock. Under the terms of the agreement, Romeo stockholders will receive 0.1186 of a share of Nikola common stock for each Romeo share, representing an equity value of approximately $144 million and 4.5% pro forma ownership of Nikola. Any remaining shares of Romeo common stock that were not tendered in the exchange offer will be canceled and converted into the right to receive the same consideration payable in the exchange offer. Romeo's Cypress, California facility will become Nikola's Battery Center of Excellence. The Merger Agreement provides certain termination rights for both Nikola and Romeo and further provides that a termination fee of $3.5 million will be payable by Romeo to Nikola if Romeo terminates the Merger Agreement. The Merger Agreement also provides certain termination rights whereby Nikola shall reimburse Romeo a termination fee of $3 million if Nikola terminates the Merger Agreement.

The transaction is subject to customary closing conditions, including regulatory approval, the condition that, prior to the expiration of the Offer, there have been validly tendered and not validly withdrawn a number of shares of Romeo Common Stock that, upon the consummation of the Offer would represent at least a majority of the aggregate voting power of the shares of Romeo Common Stock outstanding immediately after the consummation of the Offer (the “Minimum Condition”), the absence of legal restraints prohibiting the consummation of the transactions, the expiration or termination of the required waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, the effectiveness of a registration statement on Form S-4 filed by Nikola registering the Nikola Common Stock to be issued in connection with the Offer and the Merger, and the approval of shares of Nikola Common Stock for listing on Nasdaq. The transaction has been unanimously approved by the Boards of Directors of Romeo and also approved by Boards of Directors of Nikola. The offer is scheduled to expire on September 26, 2022. As of September 27, 2022, Nikola has extended the expiration of the offer at the end of October 12, 2022, unless extended further or terminated in accordance with the agreement. Nikola Corporation commenced the offer on August 29, 2022. On September 9, 2022, the waiting period applicable to the transaction under the HSR Act expired. The transaction is expected to be completed by the end of October 2022. As of August 29, 2022, the transaction is expected to close in fourth quarter of 2022.

Citigroup Global Markets Inc. acted as sole financial advisor, and Stanley F. Pierson and Drew Simon-Rooke of Pillsbury Winthrop Shaw Pittman LLP acted as the legal advisor to Nikola on the transaction. Morgan Stanley & Co. LLC acted as sole financial advisor, and David Allinson, Leah Sauter, Stephanie Teicher, Jennifer Pepin, Nineveh Alkhas, Andrea Ramezan-Jackson, Jean-Philippe Brisson, Michael Dreibelbis, Mandy Reeves, Farrell Malone, Peter Todaro, Steven Betensky, Robert Hotz, Jason Hegt, Blair Connelly and Kristin Murphy of Latham & Watkins LLP acted as the legal advisor to Romeo on the transaction. Morgan Stanley & Co. LLC acted as fairness opinion provider to the Romeo Board of Directors. Continental Stock Transfer & Trust Company acted as transfer agent and registrar to Nikola. Alliance Advisors, LLC acted as proxy solicitor to Nikola. Okapi Partners LLC acted as proxy solicitor to Romeo. Romeo has agreed to pay Morgan Stanley fee of $9.5 million, $2.375 million of which became payable upon rendering of Morgan Stanley's opinion and the execution of definitive agreement with respect to the merger, and $7.125 million which is contingent upon the closing of the merger.