Tesla has reached a deal to acquire SolarCity, putting it another step ahead in its quest to acquire the solar firm.
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This deal isn’t necessarily a lock, as Tesla’s independent shareholders still need to vote on it. (Elon Musk is actually on the board of Solar City, so he has recused himself from voting).
In the announcement, Tesla said it hopes to scale its platform from just battery-powered cars and energy storage systems to a fully integrated sustainable energy company offering a one-stop shop for going green.
Simply put, Tesla wants to move beyond electric vehicles to become a renewable-energy products company.
Tesla will pay approximately $2.6 billion for solar panel maker SolarCity in an all-stock deal. The thought would be that by merging the companies, both entities would benefit from enhanced research and design, as well as scaled products and services.
Based on Tesla’s Friday closing price the offer give rise $25.83 per share which sparked a 3.4% premium to SolarCity’s final closing price.
The deal includes a “go-shop” provision that allows SolarCity to solicit offers from other potential buyers for 45 days through September 14. Tesla also said combining the two companies would reduce hardware, manufacturing and installation expenses, while also lowering the cost of finding new customers – something that has been a stubbornly costly problem for SolarCity.
Tesla first made an offer to buy SolarCity in late June, and despite cloudy predictions from analysts, “now is the right time to bring our two companies together”, says a post on Tesla’s website announcing the acquisition.
In June, Tesla offered 0.122 to 0.131 of its shares for each SolarCity share. Within three to five years, they expect every single system across the two portfolios to include both solar and storage. SolarCity’s shares have been valued at $25.37 per share.
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This deal requires approval of the disinterested shareholders of both companies, as well as regulatory approval.
