The electric vehicle manufacturer added that now is the right time for the merger citing the reason that it is getting ready to scale its Powerwall and Powerpack stationary storage while SolarCity is preparing to offer its next-generation differentiated solar solutions. Before the deal can close, it must be approved by a majority of shareholders from both Tesla and SolarCity.
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Musk, who is also chairman and a major shareholder in SolarCity, unveiled an updated “master plan” last month in which he sketched out a vision of an integrated carbon-free energy enterprise, offering electric vehicles, auto sharing and solar energy systems. This means that SolarCity is allowed to solicit alternative proposals during that time.
Tesla is buying SolarCity, a company selling solar power systems for homes and businesses.
Tesla says that it expects the merger with SolarCity to be finalized by the fourth quarter of 2016. Tesla said SolarCity stockholders will receive 0.110 Tesla common shares per SolarCity share. It values each share of SolarCity at $25.37, according to the post.
This deal requires approval of the disinterested shareholders of both companies, as well as regulatory approval.
The merger will aim to create a single company which manages both the production and storage of electricity. And SolarCity said Monday that it experienced lower-than-expected residential bookings in the first half of the year, so it’s reducing its full-year guidance for megawatts installed to a range of 900 to 1,000 megawatts.
That may be one reason the offer price was lowered, as Wall Street sold off TSLA stock to the tune of 10 percent when the plan was first announced back in June.
“Solar and storage are at their best when they are combined”.
SolarCity also wants to leverage the network of Tesla’s 190 retail stores and worldwide presence to extend its reach.
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“It’s going to be very clear that this combination of solar combined with storage will be able to provide energy at a lower cost than traditional forms of energy”, Lyndon Rive said during the call.
