Tesla agrees deal to buy Solarcity for $2.6bn
Tesla
Motors has agreed a deal to buy solar power company, SolarCity in an
all-stock transaction worth $2.6bn (£2bn), the companies have confirmed.
Both companies are owned by Elan Musk.
The
new firm sees Tesla emphasise its battery power storage technology as
a natural fit to SolarCity’s solar generation. Musk called the merger a
“no brainer”, saying: “Instead of making three trips to a house to put
in a car charger and solar panels and battery pack, you can integrate
that into a single visit. It’s an obvious thing to do.”
According
to a statement jointly issued by the firms, “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. By joining forces, we can operate more efficiently and fully
integrate our products, while providing customers with an aesthetically
beautiful and simple one-stop solar and storage experience: one
installation, one service contract, one phone app.”
The
transaction, mooted in late June, had faced uncertain prospects as
minority shareholders in both companies had questioned the necessity of
merging the two companies. While Musk is the chief executive of Tesla
Motors, his cousins Lyndon and Peter Rive are the chief executive and
chief technology officer, respectively, of SolarCity, while Musk is
chairman. Musk and Lyndon Rive founded SolarCity in 2004, the same year
Musk joined Tesla Motors as chairman after investing in the company.
The
resultant transaction will see Elon Musk paying Elon Musk a substantial
amount of Tesla shares in exchange for his SolarCity shares. But the
companies argue that they expect to save $150m in the first year alone,
as well as being able to cut hardware and installation costs and use
Tesla’s retail network to extend SolarCity’s reach internationally.
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