A MERGER between a North-East electric truck maker and its US partner has been completed in a $15m (£9.74m) deal.

Wearside based Tanfield Group's Smith Electric Vehicles division has been bought by its US partner Smith Electric Vehicles US (Sevus), in which the North-East firm held a 49 per cent stake.

Under the deal, which was completed on Thursday night, Tanfield will retain the same percentage stake in the new, enlarged company.

It comes after Tanfield rejected a £37m offer, made in March, from Sevus to buy the Smith Electric Vehicles business outright.

In August it announced that the companies were set to merge, with the North-East firm retaining a significant stake.

It followed the US electric vehicle market taking off quicker than expected and Sevus winning the support of US President Barack Obama and his administration.

The firm will transfer to its new ownership on January 1.

Tanfield chief executive Darren Kell said: "The board of Tanfield believes that a consolidation of the Smith Electric Vehicles UK entity into our associate company, Sevus, creating a single, larger US based business, would be in the best interests of shareholders, particularly in light of the plans that Sevus management have for the combined business post this transaction."

Those plans include a possible listing on the US Nasdaq exchange.

When US electric sports car maker Tesla issued shares for the first time this year it was oversubscribed.

Sevus, based at Kansas City International Airport, was only established in February last year, as a partnership between Tanfield and US investors.

Since then it has received more than $30m in US government grants and its plant was visited by President Barack Obama in July, who highlighted the business as a beacon for green industries.

The Smith Newton truck is being used in the US by CocaCola, Staples, FritoLay, AT and T, Pacific Gas and Electric Company and Kansas City Power and Light.

Earlier this month it emerged Sevus had sold two trucks to the US Marine Corps, the first military organisation to order Smith Newtons through the Government Services Administration (GSA) schedule, to which the electric vehicles were added in February.

The schedule is a list of products approved for purchase by all Federal agencies, and the US military.