From Bankruptcy to Buyout: Volvo Acquires Proterra’s Battery Operations in the US
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Volvo Group has announced its acquisition of Proterra’s battery business for $210 million. This deal comes just a few months after the U.S. electric bus and battery manufacturer filed for bankruptcy protection in the U.S. Both companies added that they plan to complete the acquisition by early 2024.
The transaction still needs to go through several approvals, including from the bankruptcy court. If approved, Volvo will acquire a battery module and pack development center in California and a Proterra battery assembly plant in South Carolina, which opened in January 2023.
In January, Proterra increased its production at a new battery assembly plant in Greer, South Carolina. The company also operates another factory in California. In both cases, they use cylindrical cells from LG Energy Solution to produce battery packs for Proterra’s electric buses and other customers.
Proterra filed for Chapter 11 bankruptcy protection in the U.S. last August, essentially a self-bankruptcy procedure for restructuring. At the time, Proterra stated that it had set industry standards with top-tier electric vehicle and battery technology but faced various market and macroeconomic headwinds that impacted its ability to expand all opportunities simultaneously efficiently. Proterra reported hardware bottleneck issues in the summer of 2022 and cited part availability as one of its biggest challenges.
In the U.S., Chapter 11 bankruptcy proceedings are initiated to allow a company to restructure and protect the company from legal action by creditors until the restructuring is complete. If a company is deemed bankrupt and there is no basis for successful continued operations, the operation is terminated according to the rules of Chapter 7.
Proterra went public in 2021 and was valued at $1.6 billion. The market value at the last trading close before the Chapter 11 bankruptcy announcement was $362 million.
GM also filed for Chapter 11 bankruptcy proceedings after the 2009 financial crisis.
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