The easy part for Tesla Motors (TSLA) is over with: The special committee of Elon Musk’s other darling SolarCity (SCTY) , made up of the only two directors on its board who aren’t conflicted by direct ties to the potential acquirer, has agreed to a $2.6 billion takeover deal.
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Tesla will buy the solar panel maker SolarCity Corp.in an all-stock deal worth around $2.6 billion. SolarCity stockholders will receive 0.11 shares of Tesla stock for each SolarCity share, valuing them at $25.83 apiece, according to Friday’s closing prices.
In June, Tesla offered 0.122 to 0.131 of its shares for each SolarCity share. SolarCity sells solar energy systems to homeowners, businesses and government organizations, and Tesla makes high-end all- electric cars.
The deal is expected to wrap up in the fourth quarter of 2016.
SolarCity has a 45-day “go-shop” period in which it can solicit alternative acquisition proposals. The deal has a termination clause in the event it’s not completed on or before April 31, 2017.
But Musk said the companies have a lot of synergies that they can’t take advantage of unless they’re combined. With one service call, customers could get their solar panels installed and connected to a Powerwall, which preserves energy for later use. Customers could learn about SolarCity products at Tesla’s stores, for example, and save on installation costs because they’d be done more efficiently. Musk holds 21.1 percent of Tesla and 22.5 percent of SolarCity. Tesla previously said it would offer $23.56 to $25.30 per SolarCity share.
The stock price is less than half of SolarCity’s price at the start of the year on concerns of rising costs and slowing growth.
Ten-year-old SolarCity is the top provider of residential solar panels in the USA, and installs about one-fifth of all commercial solar panels.
Tesla says more than 107,000 Tesla electric vehicles are on the roads in 42 countries.
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Some Wall Streets analysts have criticized the move, citing a conflict of interest, given that Musk also serves as chairman of SolarCity.
