“This is really all part of solving the sustainable energy problem, something that has been our goal from the beginning”. “This is an important step in that direction”.
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Their proposed merger calls for SolarCity holders to receive 0.11 of a Tesla share for each SolarCity share, or $25.30 a share based on Tesla’s close Monday.
The $2.6 billion all-stock deal will bring affordable solar (SolarCity) and energy storage (Tesla) to the world.
Image: SolarCity accepts proposal for merger with Tesla Motors for $2.6bn. According to MarketWatch the deal is expected to close in the fourth quarter, it is subject to SEC review and approval from the independent shareholders of both Tesla and SolarCity.
Tesla’s second-quarter results are expected to be a variation on this theme, with losses reaching 52 cents a share, compared with 48 cents in the year-ago period.
The combined company would almost the double the size of Tesla’s workforce.
Palo Alto’s Tesla would offer SolarCity investors.
Musk said $150 million is “conservative” and based on his “gut feel”. The company said that it would issue shares as part of the deal. “There’s a lot work to do”. Musk owns a 26 percent stake in Tesla and a 22.5 percent stake in SolarCity.
“We are very bullish on solar”, Rusch said, “but I am not convinced that this is the best use of cash for Tesla”.
Through Tesla’s stores, SolarCity would get easier, cheaper access to millions of customers; SolarCity has struggled to reduce its customer acquisition costs. The electric vehicle maker has about 190 outlets will three million visitors annually.
Telsa Chief Executive Officer, Ellon Musk, claimed that the purchase of SolarCity was aimed at achieving “significant” cuts in expenses and “dramatic improvements” in manufacturing efficiency.
But Musk said the companies have synergies they can’t take advantage of unless they’re combined.
The acquisition comes as Tesla has announced an aggressive growth plan. It’s in the midst of building one of the world’s largest factories in Nevada to make batteries. It also manufactures portable battery packs to power homes and offices with clean energy.
Once entirely focused on high-end electric sports cars, Tesla appears to be moving toward a broader product line that would make the company a one-stop-shop for sustainable energy. Tesla is in the early development of new vehicles, including a small SUV, pickup truck, heavy duty truck and buses.
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SolarCity is under pressure from its rivals offering cheaper solar energy from large, scale installations, and because several state governments have placed subsidies encouraging rooftop solar.
