SolarCity stockholders will receive 0.110 Tesla common shares per SolarCity share. Japanese steelmakers increased output for the first time since 2014.
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As well as Mr Musk’s connection to both companies, another Tesla co-founder Jeffrey Straubel sits on SolarCity’s board, and Antonio Gracias, an investor, sits on both company boards.
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 one company, Tesla (storage) and SolarCity (solar) can create fully integrated residential, commercial and grid-scale products that improve the way that energy is generated, stored and consumed”.
While Musk said that Tesla did not know how many customers have solar panels, he said that he suspected that the interest was there.
The agreement allows SolarCity to solicit alternative proposals for 45 days.
Both companies clarified that Musk had not been part of the vote to confirm the merger, which could have become the brunt of lawsuits directed at the two firms. Tesla Motors original deal to purchase SolarCity was announced earlier in the month of June. Tesla could integrate solar cells onto the roofs of its vehicles and pair solar panels with its energy storage products. Tesla expects the deal to finalise in the final quarter of this year, but must gain regulatory approval and meet other closing conditions before that happens.
The deal covers a “go-shop” provision that will enable SolarCity, which had a market value of $2.62 billion as of Friday close, to search offers from other buyers until September 14.
Tesla shares were up 0.1 percent in pre-market trading to $235 on Nasdaq shortly after the deal was revealed.
The announcement comes as Tesla struggles financially due to the reduced demand for electric vehicles caused by the low price of oil.
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Up until the Friday’s close, Tesla shares posted 7% jump since the company first disclosed the offer.
