U.S. electric vehicle maker Tesla Motors Inc (NASDAQ:TSLA) is buying solar panel developer SolarCity Corp (NASDAQ:SCTY) for £2bn in a renewable energy mega-deal.
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The all-share offer ideals SolarCity SCTY, -0.67% at about $2.6 million.
US stocks are little changed Monday morning as the mixed trading of the last few days continues. They fell on Monday and at midday were trading below the offer price.
Well folks it’s official, SolarCity is joining Tesla after accepting a proposed buyout offer by the latter.
Tesla said it expects the transaction to close in the fourth quarter of 2016.
Tesla anticipates $150 million in costs savings in the first full year after closing of any tie-up with SolarCity. Examples are Musk’s cousins, Lyndon and Peter Rive, who are both members of the SolarCity board.
A number of current and former Tesla employees have revealed that they had concerns about the company’s Autopilot system before May’s fatal crash involving the semi-autonomous driving setup. Musk has insisted he’s just showing good business sense.
In a press call, Musk laid out a new-look Tesla that would combine stationary solar and storage with electric transport, all in a one-stop shop. Now, as many as three trucks and technicians might go. “If it doesn’t go through, it will be awkward”, he said.
At $231.55, the TSLA stock price is down 3.52% year to date. Batteries from Tesla’s $5 billion Gigafactory outside Sparks, Nevada, will be central to the combined enterprises. Tesla and partner Panasonic Corp 6752.T have begun installing complex, automated battery manufacturing equipment in parts of the plant as construction continues on the complex. Both companies published full statement over the deal that would form the world’s only vertically integrated energy company.
Additionally, per the agreement, SolarCity will be able to “solicit alternative proposals” until September 14, according to their announcement. Musk said in the Master Plan, Part Deux.
“If some people see things three steps ahead, Elon Musk is 10 steps ahead”, Marcus said. Before then, the deal must be approved by a majority of the disinterested shareholders of both Tesla and SolarCity voting at each shareholder meeting.
It’s been a rough day for SolarCity shareholders.
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The auto maker said it expects to save US$150mln in the first year as well as efficiency improvements from the tie-up, while beefing up the pair’s combined balance sheet.
