The Acquisition of American Battery Technology Company by Tesla Inc.

Case Study from the year 2025 in the subject Economics - Finance, grade: 1,0, , course: Mergers and Aquisitions, language: English, abstract: This pitchbook presents a strategic recommendation for Tesla, Inc. to acquire American Battery Technology Company (ABTC) through a friendly takeover valued at $1.75 per share in cash. By capitalizing on ABTC’s current financial distress, this acquisition allows Tesla to execute a classic vertical integration strategy, effectively internalizing the inbound logistics segment of Porter’s Value Chain to secure a domestic source of primary lithium and battery recycling capabilities. The proposed deal structure creates immediate value accretion by arbitraging Tesla’s superior cost of capital against the target’s distressed WACC, monetizing stranded Section 45X tax credits, and unlocking operational synergies through the geographic colocation of ABTC’s Fernley facility with Tesla’s Nevada Gigafactory. While facing some regulatory risks, the transaction transforms a vulnerable supply chain bottleneck into a strategic asset, ensuring long-term and home sourced mineral security at a fraction of the cost of greenfield development.