Tesla Motors Inc. on Monday announced it reached a deal to buy SolarCity Corp., combining Elon Musk’s electric-car and solar-energy companies. If the Powerwall were hooked up to solar panels sold by SolarCity, the combined companies could sell both products as a single offering. Customers could learn about SolarCity products at Tesla’s stores, for example, and save on installation costs because they’d be done more efficiently. In addition to its array of automobiles, the company now sells a product called the Powerwall, a $3,000 6.4 kWh battery designed for residences and businesses-such as saving up power from solar cells for nighttime use.
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Independent members of both boards approved this deal with $2.6 billion based on last week’s average price, according to Tesla.
Under the all-stock deal, SolarCity shareholders will receive 0.11 share of Tesla for each share of SolarCity. Shares of SolarCity fell almost 5 percent on the news, as the price tag was about $300 million less than Tesla offered in June. Tesla, and Musk, say storage and solar are at their best when they’re combined.
As part of the agreement, SolarCity has a 45-day period known as a “go-shop”, which runs through September 14, 2016. Musk initially offered $26.50 to $28.50 a share in Tesla stock. 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. In addition to his role with Tesla, Musk is also the chairman and largest individual shareholder of SolarCity.
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Tesla said the two firms will save up to $150m (£113m) on operating cost in the first year after the acquisition. At $25.83 per share, SolarCity’s shareholders will get 0.11 Tesla shares for each SolarCity one. While Tesla’s shares closed 2% at $230.01. We also expect to save customers money by lowering hardware costs, reducing installation costs, improving our manufacturing efficiency and reducing our customer acquisition costs.
