GM, Nikola continue deal discussions, unclear when they will finalize

Kalea Hall
The Detroit News

Detroit — General Motors Co. and Nikola Corp. are still negotiating the terms of their alliance though they were expected to close on the deal before Sept. 30, the companies said Tuesday.

“Our transaction with Nikola has not closed," GM said in a statement. "We are continuing our discussions with Nikola and will provide further updates when appropriate or required.” 

The company didn't specify when the deal is likely to close, but GM has said it remains committed to forming a 10-year alliance with Nikola.

The deal between GM and Nikola was expected to close before Sept. 30, but negotiations continue.

GM's partnership with Phoenix-based Nikola is being negotiated as the startup comes under fire by a short-seller for allegedly misleading investors on Nikola vehicles' capabilities and technology, forcing Nikola Founder Trevor Milton to resign as executive chairman last week.

Stephen Girsky, who had numerous roles at GM from 2009 to 2014 and who helped orchestrate the partnership between the two, took over immediately as chairman.

GM announced the partnership with Nikola in early September. Under the agreement, Nikola would utilize GM’s new Ultium battery system and Hydrotec fuel-cell technology for its vehicles. GM would engineer and manufacture the Nikola Badger truck's battery-electric and fuel-cell versions. In exchange, Nikola would give GM $2 billion in newly issued common stock and an 11% stake in its company.

After the two announced their intended partnership, Hindenburg Research released a report Sept. 10 calling Nikola  "an intricate fraud built on dozens of lies." The report did not involve GM. Hindenburg, which has a short position on Nikola, could stand to benefit from decreases in its stock price. 

The Nikola-GM deal could be terminated by either company if the closing doesn't occur by Dec. 3, according to a Nikola Securities and Exchange Commission filing.  

In a statement Nikola spokesperson said: “Nikola continues to work with GM towards a closing and will provide further updates when appropriate or required.”

More bad headlines for Nikola hit this week after two women accused Milton of sexual assault more than 15 years ago.

Nikola's stock price was down 7.36% at market close Tuesday following the reports. Nikola's stock closed at $50.05 on Sept. 8, the day of the GM alliance announcement. On Tuesday, the stock price was $17.88 at close.

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