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Tesla announces final offer to acquire battery company Maxwell

Tesla announces its final offer to acquire battery company Maxwell and the deal is expected to close this week after initially being announced in February.

Earlier this year, Tesla announced the acquisition of the San Diego-based ultracapacitor and battery company Maxwell for over $200 million.

We later learned that Tesla and Maxwell had discussions for years over potential opportunities between the two companies, but Tesla became serious about acquiring them in December 2018.

The two companies negotiated over the price of the acquisition months before agreeing, but even then some investors weren’t happy and they sued to block the transaction.

During Tesla’s earnings report last month, General Counsel Jonathan Chang said that they didn’t expect any issue and they were aiming to close mid-May:

“Right now, we are just going through approvals with the SEC. There is not a whole lot of things holding it back. We are on schedule, we are on track. Right now, we are looking to close in mid-May.”

Today, Tesla announced its final offer to close the deal:

“Tesla, Inc. today announced the final offer consideration for its previously announced offer to exchange all outstanding shares of common stock of Maxwell Technologies, Inc. for shares of Tesla common stock.  Based on the terms of the previously announced merger agreement between Tesla and Maxwell, as well as the terms and conditions set forth in Tesla’s exchange offer materials and related letter of transmittal, if the exchange offer is completed on its currently scheduled expiration date, each share of Maxwell common stock that is validly tendered in the offer and not withdrawn prior to the expiration date of the offer will be entitled to receive 0.0193 of a share of Tesla common stock, together with cash in lieu of any fractional shares of Tesla common stock, without interest and less any applicable withholding taxes.”

The company says that the offer is set to expire by the end-of-day “on May 15, 2019, unless it is further extended or earlier terminated in accordance with the merger agreement between Tesla and Maxwell.”

Tesla saw its share price drop drastically since reaching a deal with the company, which results in more shares needed to reach the amount agreed upon for the deal.

The entire transaction would be worth $235,674,520.50.

Maxwell is best-known as an ultracapacitor manufacturer and it has also recently been discussing a dry electrode technology for batteries.

We suspect that Tesla was actually more interested in their new dry electrode technology to use in Li-ion battery cells.

In a paper published last year, Maxwell’s lead chemists and battery scientists described their coating technology:

“Unlike conventional slurry cast wet coated electrode, Maxwell’s DBE offers significantly high loading and produces a thick electrode that allows for high energy density cells without compromising physical properties and electrochemical performance. Maxwell’s DBE exhibits better discharge rate capability than those of wet coated electrode. Maxwell has demonstrated scalability by producing robust self supporting dry coated electrode film in roll form with excellent long-term electrochemical cycle performance, and established large pouch cell prototypes in greater than 10Ah format.”

Maxwell claims that its electrode enables an energy density of over 300 Wh/kg in current demonstration cells and they see a path to over 500 Wh/kg.

They also demonstrate close to 90% capacity retention after almost 1,500 cycles and their cells maintain their capacity at higher discharge rates and much better than the same cells without their dry electrode.

Tesla could be looking to acquire the company in order to implement this technology into their own batteries, but they would need to complete the transaction.

CEO Elon Musk refused to comment on the reason behind the transaction when asked about it last month.

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