Announcing the merger, SolarCity, said it will soon have an “integrated solar and storage offering”, as well as a “solar product focused on the five million new roofs installed each year in the US”.
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The merger will create a new sustainable energy company, which will develop residential, commercial and grid-scale products that enhance the way that energy is generated, stored and consumed.
By working jointly, it will be able to offer a one-stop shop for both solar power and energy storage, using a single installer and a single phone app for managing the systems and a single contract for service when necessary.
Under the terms of the deal, SolarCity stockholders will receive 0.11 share of Tesla for each share of SolarCity, valuing them at $25.83 apiece.
The deal is expected to close within the fourth quarter on 2016. It should also be mentioned that Tesla CEO Elon Musk co-founded SolarCity and still sits on the company’s board.
It has been reported today that Tesla and SolarCity have agreed to engage in a $2.6 billion merger which will allow the partnership to create “integrated solar and storage” solutions that are already under development.
The two companies on Monday announced an agreement to merge, with Tesla holding 93.5 percent of the combined companies and SolarCity 6.5 percent. Chairman Elon Musk has since said the company may require more money to finance additional products. He may be biting off more than he can chew with both companies. Musk will pay himself a large amount of Tesla shares in exchange for SolarCity shares.
Well folks it’s official, SolarCity is joining Tesla after accepting a proposed buyout offer by the latter. “Now that Tesla is ready to scale Powerwall and SolarCity is ready to provide highly differentiated solar, the time has come to bring them together”. Tesla’s shares fell 2 percent to $231.01. According to Tesla, the deal could represent $150 million in cost savings during the first full year after the deal closes, which is nothing to scoff at.
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SolarCity (SCTY) will get 45 days to seek an alternative suitor in a provision known as a “go-shop” period.
