Tesla will buy the solar panel maker SolarCity Corp.in an all-stock deal worth around $2.6 billion.
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Tesla said the combination would create “the world’s only vertically integrated sustainable energy company”, bringing together Tesla’s electric vehicle line and its home battery offerings with SolarCity’s power-generating business.
Automotive and energy storage company, Tesla Motors Inc, are looking to purchase American energy service provider, SolarCity.
SolarCity leads the nation in rooftop solar systems for homes, however, it also routinely posts quarterly losses, and has seen its stock plummet nearly 60 percent this year.
Musk initially offered $26.50 to $28.50 a share in Tesla stock, Bloomberg reported. SolarCity stockholders will receive 0.110 Tesla common shares per SolarCity share. They expect customers to benefit through lower hardware and installation costs, and plan to use Tesla’s 190 stores to expand SolarCity’s reach. But SolarCity also has regularly disappointed investors by falling short of its installation targets in recent quarters. While Tesla’s shares closed 2% at $230.01.
When the companies first announced their intentions to merge in June, Musk said the combination would make selling clean energy “completely seamless, painless”.
Up until the Friday’s close, Tesla shares posted 7% jump since the company first disclosed the offer.
“I know about as much as you do about how this price was obtained”, he said.
If that’s not enough for you, remember, all this was announced a couple months ago, which made Tesla’s shareholders pretty pissed.
SolarCity has 45 days to find another more suitable mate, in what’s called a “go-shop” period. He may be biting off more than he can chew with both companies. In addition to its array of automobiles, the company now sells a product called the Powerwall, a $3,000 6.4 kWh battery designed for residences and businesses-such as saving up power from solar cells for nighttime use. Its revenue was $399 million in 2015 with a net loss of $58 million.
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At its mid-morning share price just under $25.41, SolarCity shares seem to be pricing in a 100 percent chance the deal will go through.
