In Big Oil’s latest foray into green energy, Shell has announced its acquisition of Volta, Inc. for $169 million.
Expected to close during the first half of 2023, the all-cash deal “builds on the momentum in electric mobility by combining one of the leading EV charging and media companies in the U.S. with one of the worlds largest energy suppliers,” according to the joint press release. “Both Volta and Shell have a demonstrated ability to meet the changing needs of customers, and this acquisition will bring that experience together to provide the options that are needed as more drivers choose electric.”
Volta was founded in Hawaii in 2010 with early investment from Leonardo DiCaprio. The company went public in 2021 via a SPAC acquisition and has installed thousands of charging stations across the United States. Volta provides service to all major hybrid and electric vehicles – and for free because the company collects revenues from the advertisements that its charging stations broadcast on screens as its customers charge their cars. However, the company’s cash reserves have been so depleted that the merger agreement includes a provision for an affiliate of Shell to provide “subordinated secured term loans to Volta to bridge Volta through the closing of the transaction.” Shell boasts plenty of cash on its balance sheet.
During 2022, oil companies enjoyed booming profits as high oil prices along with insatiable demand from consumers. At the same time, the companies have come under fire, for their contributions to climate change, prompting commitments from many within the industry to reduce emissions.
Like other oil companies, however, Shell has been criticized for distancing itself from its emissions commitments, and even for “gaslighting” the public – but Shell’s acquisition of Volta is a step toward its commitments. As CEO of Royal Dutch Shell PLC, Ben van Beurden, said, “First of all, the world needs oil — and gas, for that matter. And that will not change overnight. This is why Shell will continue to invest in oil and gas, even as we work to help speed progress to a lower-carbon future.” The company intends to pursue both its fossil fuels businesses in addition to investing in greener pastures.
The Volta acquisition may prove not just good for the environment, but also Shell’s bottom line. As consumers increasingly convert to electric and hybrid vehicles, the charging market is projected to balloon from $46.54 billion in 2022 to over $417.35 billion by 2030. Shell seeks to capture those revenues, even if it means reduced demand for its oil products.
According to Matterhorn’s M&A database, which tracks publicly-announced deals over $25 million in value, Volta is advised by law firm Shearman & Sterling LLP, and financial advisers Raymond James & Associates, Inc., Goldman Sachs & Co. LLC; and Barclays Capital Inc. Shell is advised by Norton Rose Fulbright and financial adviser UBS Securities LLC.