Transnational oil and gas company Shell is acquiring the American EV charging network Volta in an all-cash transaction worth around $169 million through its US-based subsidiary, Shell USA, as per TechCrunch.
Merger agreement
Shell USA will buy Volta through a full cash purchase of all its Class A common stock valued at approximately $169 million at $0.86 per share upon the completion.
Notably, that amount is equivalent to an 18% premium over the Volta stock’s closing price on January 17, 2023. Following the news, Volta shares increased 0.73% from less than $1 since November.
The Volta board unanimously approved the acquisition. It is expected to close in the first half of the year.
What is expected?
The merger would deploy Volta’s potent dual charging and media network to Shell USA. It is expected to trigger strong, long-term growth in EV charging.
“The shift to e-mobility is unstoppable, and Shell recognizes Volta’s industry-leading dual charging and media model delivers a public charging offering that is affordable, reliable, and accessible.”
Interim CEO Vince Cubbage
Why is the merger significant for Volta?
Volta had a good start in the EV charging industry with over $200 million in capital before launching an IPO via SPAC in 2021. However, the company’s stock price has stagnated, and its financial reserves have been exhausted.
In fact, the acquisition deal stipulates that the Shell subsidiary will offer loans to Volta to support it in getting through the transaction.
“Volta’s ability to capture it independently, in challenging market conditions and with ongoing capital constraints, was limited. This transaction creates value for our shareholders and provides our exceptional employees and other stakeholders a clear path forward.”
Interim CEO Vince Cubbage
Energy firms join EV drive
This deal demonstrates how energy firms are purchasing or investing funds in EV charging infrastructure as demand for electric vehicles increases. Among the expanding number of oil firms acquiring EV charging infrastructure are BP, Total, and France’s EDF.
Apart from that, the European charging network Ubitricity was also previously purchased by Shell.
The merger of one of the top EV charging companies in the United States with one of the biggest energy suppliers in the world strengthens the momentum for electric mobility.
