Tesla said the independent board members of both companies had voted to authorize the deal, meaning Musk did not cast a ballot on the accord. What if Tesla shareholders do not approve this deal?
Advertisement
The companies said on Monday that SolarCity stockholders would receive 0.110 Tesla common shares for every share held. Before then, the deal must be approved by a majority of the disinterested shareholders of both Tesla and SolarCity voting at each shareholder meeting.
But Musk said the companies have a lot of synergies that they can’t take advantage of unless they’re combined.
Combining these two companies is actually part of Musk’s larger grand plan for Tesla, which includes creating a broad portfolio of Tesla vehicles that range from low-volume/high-cost to low-cost/high-volume and building a company that can handle both the generation and storage of energy. By joining forces, we can operate more efficiently and fully integrate our products, while providing customers with an aesthetically attractive and simple one-stop solar and storage experience: “one installation, one service contract, one phone app”.
When Telsa CEO Elon Musk announced in late June that he would try to buy SolarCity, headed by his cousin Lyndon Rive, the strategy seemed more thought-out than the deal itself.
The grand plan of Silicon Valley billionaire Elon Musk to marry his companies Tesla Motors and SolarCity could become a reality, pending shareholder approval.
Despite Musk’s assurances that the companies will be better off for merging, Wall Street initially hated the deal.
The stock price of Tesla declined less than 1% to $233.94 per share and SolarCity down almost 5% to $25.38 per share around 10:59 a.m.in NY.
Tesla says that customers will enjoy a streamlined experience because they’ll have to deal with just one installation and one service contract, and that they’ll be able to manage everything via a single app.
Japanese steelmakers boosted output over April to June, with top producer Nippon Steel & Sumitomo Metal posting its first such increase since 2014 on improved prices, but their annual profits are expected to be eroded as a firm yen hurts key customers. Tesla shares valued almost $220 on June 21 dipped to $193 on June 24.
SolarCity leads the nation in rooftop solar systems for homes, however, it also routinely posts quarterly losses, and has seen its stock plummet nearly 60 percent this year.
Advertisement
SolarCity’s stock slid more than 6 per cent to $25.07 in early trading Monday.
