The amount Tesla has offered is on the low range with SolarCity shareholders receiving 0.11 share of Tesla for each SolarCity share. Before then, the deal must be approved by a majority of the disinterested shareholders of both Tesla and SolarCity voting at each shareholder meeting. 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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In addition to the luxury electric vehicles it has become known for, Tesla also manufactures a home energy storage system created to complement renewable power generators such as solar cells.
California-based Tesla is known for its electric cars but since a year ago has also been selling batteries for residential and commercial use.
As per reports, until now there was no certainty of a merger agreement because SolarCity had made a special committee to review the offer of Tesla devoid of Musk’s influence or other executive members close to him.
Tesla says that it expects the merger with SolarCity to be finalized by the fourth quarter of 2016. (NASDAQ:SCTY) announced on Monday that they have reached on an agreement through which Tesla Motors will buy SolarCity Corp. for $2.6 billion. So has Antonio Gracias, who sits on the board at both companies.
“This is really all part of solving the sustainable energy problem”, Tesla CEO Elon Musk said on a conference call. If the deal sees light of the day, it would mark the completion of Elon Musk’s first master plan to create solar roofs with flawlessly integrated battery storage system. SolarCity shares fell 3.8% to $25.70.
In addition to shareholder approval, both companies must receive regulatory approval.
The companies said the deal would also save customers money by lowering hardware costs and reducing installation costs.
“Solar and storage are at their best when they’re combined”, noted a Tesla statement.
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After the proposal was initially announced in June, Tesla’s stock price plummeted, but it has since rebounded.
