Tesla to Merge with SolarCity

By Jesse Sokolow on 1 August 2016
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A Tesla S at a charging station

Tesla Motors announced that it reached an agreement to acquire solar energy company SolarCity for approximately $2.6 billion.

The deal, which brings together two money-losing companies, requires the approval by holders of a majority of the total votes of shares of SolarCity common stock not owned by Tesla CEO Elon Musk and other directors and executives of Tesla and SolarCity.

The combined company will offer a unique combination of solar, storage and transportation options and boast a workforce of some 30,000 people. The deal will vertically integrate Tesla’s battery-storage business with a solar panel company and attempt to build on Tesla’s greater name recognition and retail presence.

Musk owns over 20% of both companies and their largest shareholder.  SolarCity stockholders would receive 0.11 share of Tesla for each share of SolarCity, valuing them at $25.83 apiece, based on Friday’s closing prices.

Tesla has a market capitalization of about $34.6 billion.

(Photo: Accura Media Group)