ElectraMeccanica calls off merger with electric truck maker Tevva

The merger was to be completed this quarter. But the Canadian EV maker called off the deal, citing "several incurable breaches of the agreement" by its potential partner. (Update at the end of the article)

Image: Tevva

The merger of British electric truck manufacturer Tevva and Canadian EV maker ElectraMeccanica is off the table. ElectraMeccanica called off the deal, citing “multiple incurable breaches of the agreement by Tevva, including failures by Tevva to disclose to ElectraMeccanica material information about Tevva.”

Furthermore, the EV maker states that it “intends to explore all legal recourse available to it in connection with Tevva’s material breaches of the arrangement agreement” and that all the money lent to Tevva “under the secured facility” has to be repaid to ElectraMeccanica by 2 January 2024. The EV manufacturer sees itself in a good enough financial position to continue its business without Tevva at its side.

Tevva rejects the allegations and says it is “deeply disappointed” by ElectraMeccanica’s decision. It will shortly publish its rebuttal of ElectraMeccanica’s allegations, as the company “had no opportunity to respond to ElectraMeccanica’s claims before they went public.”

The electric truck manufacturer says that it had given its potential partner access “at every point” and that it “strongly refutes the basis under which the planned merger was terminated.” It, too, will seek legal consequences.

The merger was announced in August. According to details published back then, Tevva was to own 76.5 per cent of the company and ElectraMeccanica 23.5 per cent. The goal was to jointly focus on the electric commercial vehicle market – first in the UK and then in continental Europe and the US.

Tevva also announced a restructuring of its management team in the wake of the collapsed deal. David Roberts will take over as CEO, while Ken Scott will take on the role of Managing Director. The company also resumed talks with other potential merger partners and remains confident that “it will secure both medium and long-term financing to complete its business plan of commercialisation and ramp up sales.”

Update 06 November 2023

The failed merger between the British electric truck manufacturer Tevva and the Canadian EV manufacturer ElectraMeccanica now has the feared legal repercussions. Tevva has filed a lawsuit against ElectraMeccanica and CEO Susan Docherty in the US District Court in Arizona, seeking “redress for the improper and unmerited purported termination of the binding merger arrangement agreement with Tevva.”

ElectraMeccanica has been given until 17 November 2023 “to reach an acceptable solution to this situation.” Tevva is seeking $75 million in damages, an injunction preventing ElectraMeccanica from entering into an alternative merger agreement, and a protective order preventing the Canadian company from distributing money needed to pay the damages to Tevva in the form of dividends.

emvauto.com (ElectraMeccanica), prnewswire.com (Tevva), tevva.com (update)


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