Electric heavy truck maker Nikola said Monday that it reached a $144 million deal to purchase battery pack supplier Romeo Power, which will provide the company with a more streamlined and efficient supply chain.

This all-stock transaction gives Romeo 74 cents per share, which is a 34% premium. After this news, Romeo’s stock has been trending upwards by about 27% on Monday. Nikola’s shares fell nearly 8%.

As part of the agreement, Nikola will provide Romeo with $35 million to carry it until the transaction is complete, the companies said. The acquisition could save Nikola up to $350 million over the next four years.

California-based Romeo manufactures lithium-ion battery modules and packs for electric vehicles using cells manufactured by other companies. The largest Romeo customer has been Nikola, which began shipping electric semi-trucks earlier this year and expects to ship between 300 and 500 cars in 2022.

Nikola CEO Mark Russell said the acquisition will allow them to develop their electrification platform more quickly.

As a result of our strong relationship with Romeo and our ongoing collaboration, we are confident that we can successfully integrate and realize several expected strategic and financial benefits from this acquisition,” he explained.

It is an important deal for Romeo, a company that, like Nikola, has gone public via mergers with special purpose acquisition companies. Romeo went public in late 2020 through a SPAC merger valued at $900 million.

Although Romeo had just $66.8 million left in cash and equivalents after incurring losses totaling more than $250 million in the first quarter. Romeo may have run out of options to stay afloat with its shares trading below $1 in recent weeks and interest rates rising.

After Nikola’s former CEO, Trevor Milton, was ousted for reportedly lying to investors about his technology and potential order book, Nikola is still trying to receive shareholder approval for increasing the number of shares it has, something that has been blocked by Trevor Milton.

Nikola will hold a shareholder meeting again on Tuesday to announce the current vote totals.

Nikola said it has enough unissued stock to complete the acquisition of Romeo even if the proposal to increase its shares outstanding fails.