In the statement which announced the merger, the companies said: “Now is the right time to bring our two companies together: Tesla is getting ready to scale our Powerwall and Powerpack stationary storage products and SolarCity is getting ready to offer next-generation differentiated solar solutions”.
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Electric vehicle maker Tesla said on Monday it won agreement from SolarCity to acquire the solar power company for US$2.6 billion, confirming a deal that has been criticized on Wall Street. Under the agreement, SolarCity shareholders will recieve 0.110 Tesla common shares (valued at R353,47 ($25.37)) for every SolarCity share they own.
Some analysts also questioned whether the deal would divert Tesla’s attention from an ambitious plan to significantly expand electric-car production in the next few years.
While Musk said that Tesla did not know how many customers have solar panels, he said that he suspected that the interest was there.
In addition to the luxury electric vehicles it has become known for, Tesla also manufactures a home energy storage system created to complement renewable power generators such as solar cells.
Since Tesla CEO Elon Musk is the majority shareholder in both companies, he has recused himself from voting. The deal is expected to be finalized by the end of 2016. Tesla could integrate solar cells onto the roofs of its vehicles and pair solar panels with its energy storage products.
According to Tesla, SolarCity also has a 45-day period ending September 14 during which it can solicit alternative proposals.
Tesla reported a loss of $282.3 million in the first quarter and has had annual losses the last five years.
Shares in Tesla rose US0.09 to US234.80 in morning trading in NY, but SolarCity’s stock fell US1.39, or 5.21%, to US25.31.
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The deal also contains a clause in which SolarCity is permitted to “go-shop” for a better deal.
