Tesla Motors, the electric-car maker, offered Tuesday to buy rooftop solar provider SolarCity, another company that heavily involves Musk, in a stock swap worth $2.8 billion.
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In an all-cash acquisition deal, which could stand at a net value worth 2.8 billion dollars, Tesla aims to integrate SolarCity into its electric vehicle business and emerge out as a one-stop shop for all electric mobility technologies and the peripherals required to support the ecosystem.
And in after-hours trading Tesla’s share price dropped as much as 10 percent, slipping below $200 for the first time since March. Buying a forward-thinking solar power company seems like the flawless fit for Tesla, which might look like a auto company, but could also be viewed as a battery company. Musk explained that “instead of having 3 trips to a house to put in a vehicle charger”, deliver the Tesla, and install solar panels, it could all be done at the same time.
A Tesla-Solar City merger would package the two Elon Musk companies’ products and services. After all, Musk is chairman of SolarCity and its largest shareholder with 21.8 million shares or 22.2% of the company, says S&P Global Market Intelligence.
On June 20, Tesla’s board of directors sent a letter to SolarCity CEO Lyndon Rive offering to buy SolarCity in an all-stock deal. (NASDAQ:SCTY) has received an acquisition offer from Tesla Motors.
Tesla announced on its website the offer for SolarCity, the biggest U.S. installer of rooftop solar systems, which is run by Musk’s cousin Lyndon Rive. “It’s an obvious thing to do”.
In March 2015, the company launched Tesla Energy, which offers Powerwall and Powerpack renewable energy storage products for home and business use. Brian said, “It is even more clear that Tesla will need additional cash raises to continue its expansion of electric auto and battery production”. There are suggestions, however, that Tesla is bailing out SolarCity, which according to Reuters has around $6.24 billion in liabilities, including debt.
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The sale needs shareholder approval, with Musk refusing to take part in the vote.
