This morning, Tesla announced that it has plans to buy the solar energy firm SolarCity. The companies hope that by joining together, it will allow them to enlarge their battery and solar energy movements. Tesla described the emerging firm as "the world's only vertically integrated sustainable energy company." By buying SolarCity, Tesla says it will allow them to create "fully integrated residential, commercial and grid-scale products" for generating, storing, and distributing solar power.
Tesla originally offered to acquire SolarCity in June, part of CEO Elon Musk's "Secret Mater Plan" for Tesla. This long-term plan attempts a broad, ambitious outline of their future. They have plans to create "stunning solar roofs with seamlessly integrated battery storage" along with expanding Tesla's collection of electric vehicles including heavy-duty trucks and public transit systems.
In a blog post by Tesla, it revealed hopes to buy SolarCity in a $2.6 billion all-stock deal, with stockholders in the recent firm receiving 0.110 common shares per SolarCity share. The deal is not completely over because the agreement has a 45-day "go-shop" clause, which allows SolarCity to seek other offers until September 14, 2016. Nonetheless, Tesla is sure of this deal and that it will be closed in the last quarter if this year.
A possible hurdle could be the influence of Elon Musk himself. The entrepreneur is the CEO of Tesla but is also the chairman of SolarCity and the biggest shareholder in both companies. The CEO of SolarCity, Lyndon Rive, is also Musk's cousin. Reuters reports that Elon Musk, Lyndon Rive, and a few other Tesla and SolarCity executives have ruled out themselves from voting on the deal.
Source: Tesla
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