Tesla Motors and SolarCity have confirmed a $2.6bn all-stock transaction that will see the electric automaker and solar panel manufacturer merge. His motivation to pair Tesla with the San Mateo, California, solar company primarily revolves around a battery system that stores solar energy in homes and businesses. “As one company, Tesla (storage) and SolarCity (solar) can create fully integrated commercial, residential and grid-scale products that improve the way that energy is generated, stored and consumed”, a blog post on Tesla’s website stated.
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But Musk said the companies have synergies they can’t take advantage of unless they’re combined. Customers will get an “aesthetically lovely and simple one-stop solar + storage experience: one installation, one service contract, one phone app”, they say, all at lower costs.
Elon Musk’s vision of combining his two companies, Tesla and SolarCity, to speed up sustainable energy production is finally seeing the light of the day. It’s expected to close in the fourth quarter if it goes through. The all-stock deal priced the company at $2.8 billion and Tesla promised the SolarCity shareholders will receive 0.11 shares of the automaker for every SolarCity share.
The company, run by Silicon Valley entrepreneur Elon Musk, said on Wednesday it was on track to deliver about 50,000 new Model S and Model X vehicles during the second half of 2016. The agreement allows SolarCity to solicit alternative proposals for 45 days.
SolarCity board members Nancy Pfund and Donald Kendall Jr. were chosen to consider Tesla’s bid.
Others have questioned possible conflicts of interest in the deal.
If Tesla can really meet its full-year production targets and its projected margin improvements and keep all its other balls in the air, the company has a chance to reach a new high by the end of the year. That value equates to approximately $25.80 a share based on Tesla’s stock price at last Friday’s closing.
Shares of Tesla Motors have dropped 2.7% to $223.77 at 11:32 a.m. today, while SolarCity has tumbled 4.3% to $23.67.
He has called the deal a “no-brainer” and said the tie-up would save $150m a year.
DETROIT (AP) – Electric auto maker Tesla Motors Inc. ended its turbulent second quarter with a larger-than-expected loss but said it remains on track to increase production in the second half of this year and introduce a new vehicle in 2017.
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Tesla unveiled a big battery Gigafactory in Nevada last week and said it would begin to ramp up production later this year.
