Tesla describes this as a “fully integrated residential, commercial and grid-scale product” which aims to improve the way energy is generated, stored and consumed.
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Musk has made the case for the merger repeatedly, arguing that by installing solar panels on their roofs, consumers will be able to send power to Tesla storage batteries – from the company’s $5 billion Gigafactory in Nevada – and cars in their homes.
Some analysts were skeptical of the Tesla decision, with the company being until now mainly a vehicle maker (though which launched its PowerWall lithium ion storage product last year).
The companies expect to save $150 million in “cost synergies” for the first full year of combined operation.
SolarCity Corp. board members approved a $2.6 billion buyout from Elon Musk’s Tesla Motors Inc., a lower price than was initially offered in the solar industry’s biggest deal to date.
Other SolarCity directors have also excluded themselves from voting: Musk’s cousins Lyndon and Peter Rive, the co-founders of SolarCity, as well as JB Straubel and Antonio Gracias, who also have ties to both companies.
But in trading Monday, SolarCity shares fell more than 7% to $24.74 while Tesla dropped 1.3% to $231.70 amid concerns about the companies’ cash flow and the rationale for the deal. As part of the agreement, SolarCity has a 45-day “go shop” period, through September 14.
Once combined, the service offered will include installation of panels and power packs, a single contract with Tesla, and a phone app to manage electricity production and usage.
After the review, the committee “unanimously determined” that the terms and conditions of the merger were in the best interest of SolarCity shareholders and recommended they vote for adoption and approval of the merger agreement, the company said.
We don’t know how these insane kids got it together so fast [ed note: we do], but it seems like the SolarCity Tesla merger is pretty much a done deal… SolarCity stockholders will receive 0.110 Tesla common shares per SolarCity share, valuing SolarCity common stock at $25.37 per share based on the five-day volume weighted average price of Tesla shares as of July 29, 2016. Musk said he had no role in establishing the value of the deal. And lo, the rumors have proven true: this morning on the Tesla blog, the automaker posted information about the massive, $2.6 billion deal.
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Tesla rose 1.8 percent to close Friday at $234.79. Tesla shares plummeted in the weeks following the initial announcement.
