Tesla is dreaming to transform it as a carbon-free energy and transport company and the merger will help in offering one-stop solar and storage experience with one installation, one service contract and one phone app.
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While Musk said that Tesla did not know how many customers have solar panels, he said that he suspected that the interest was there.
Both firms are the brainchild of entrepreneur Elon Musk, who is also the CEO of Tesla Motors. The management at Tesla believes this would be the only integrated sustainable energy company across the globe.
Little doubt existed over whether SolarCity would agree to the deal, since being folded into a company with much stronger investor support at a premium price definitely makes sense for SolarCity, a struggling residential solar panel installer that has failed to meet its investors expectations in the past year.
Electric auto maker Tesla said on Monday it won agreement from SolarCity to acquire the solar power company for US$2.6 billion, confirming a deal that has been criticized on Wall Street.
The merger is expected to save an estimate of $150 million in its first year if the deal is approved. We also expect to save customers money by lowering hardware costs, reducing installation costs, improving our manufacturing efficiency and reducing our customer acquisition costs.
At a $25.83 per share price, SolarCity’s shareholders will add 0.11 Tesla shares for each SolarCity share they own. His motivation to pair Tesla with the San Mateo, California, solar company primarily revolves around a battery system that stores solar energy in homes and businesses.
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About 3.35 million shares traded hands. Back in June of this year, the electric vehicle producer had proposed a range of $26.50 and $28.50 per SolarCity share. As part of the agreement, SolarCity said that it has a 45-day period known as a “go-shop”, which runs through September 14, 2016 and means that SolarCity is allowed to solicit alternative proposals during that time. The consensus estimate suggests a rise of 71% year-on-year, resulting in $1.64 billion revenue for the quarter.
