US-based automotive and energy storage company Tesla Motors has agreed to acquire solar panel maker SolarCity in a deal worth $2.6bn.
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Combining the clean energy vehicle maker with the solar panel installer is a key pillar of billionaire Elon Musk, who earlier in July unveiled his master plan “part deux” that calls for the combined company to offer consumers a single source of hardware to power a low-carbon lifestyle.
“Solar and storage are at their best when they are combined”. Musk has said that any merger wouldn’t cause issues for its plans on the Model 3 EV and Gigafactory, with the latter just opening recently.
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. Each of the shares will be valued at $25.37, which is slightly less than the previously proposed price range.
Tesla shareholders have gradually warmed up to the deal with SolarCity following initial apprehension after Tesla announced its offer on June 21.
The deal will provide Tesla Motors with significant cost savings and dramatic improvements in manufacturing efficiency, reported Reuters.
Tesla says that the as part of the agreement, SolarCity has a 45-day period called “go-shop”, which will be valid till 14 September 2016. Now, with the merger, Tesla will own 93.5 percent of the combined companies and 6.5 percent will be held by SolarCity. Tesla shares increased by 0.51 percent at $235.99.
Some analysts were skeptical of the Tesla decision, with the company being until now mainly a vehicle maker (though which launched its PowerWall lithium ion storage product last year).
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The deal, which is expected to close in the fourth quarter of 2016, must be approved by a majority of both Tesla’s and SolarCity’s shareholders, with votes being cast at each shareholders’ meeting, according to Tesla.
