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.