Tesla announced this morning that it plans to buy solar energy firm SolarCity. The two companies hope that joining forces will allow them to scale their battery and solar energy operations, with Tesla describing the resulting firm as "the world's only vertically integrated sustainable energy company." Buying SolarCity, says Tesla, will allow it to create "fully integrated residential, commercial and grid-scale products" for generating, storing, and distributing solar power.
The automaker initially offered to acquire SolarCity back in June as part of CEO Elon Musk's "Secret Master Plan" for Tesla. This long-term roadmap offers a broad, ambitious outline of the company's future, covering plans to create "stunning solar roofs with seamlessly integrated battery storage" as well as expand Tesla's lineup of electric vehicles to include public transit systems and heavy-duty trucks.
all part of tesla's "secret master plan"
In a blog post published this morning, Tesla said it hopes to acquire SolarCity in a $2.6 billion all-stock deal, with stockholders in the latter firm receiving 0.110 common Tesla shares per SolarCity share. (With SolarCity's stock valued at $25.37 per share.) The deal is not complete though, as the agreement includes a 45-day "go-shop" clause, allowing SolarCity to solicit alternative offers up until September 14th this year. Nevertheless, Tesla is confident the deal will be closed in the fourth quarter this year.
One of the possible barriers has been the influence of Musk himself. The South African-born entrepreneur is the chief executive of Tesla, but also the chairman of SolarCity and the biggest individual shareholder of both firms. SolarCity's CEO, Lyndon Rive, is also Musk's cousin. Reuters reports that Musk, Rive, and a number of Tesla and SolarCity executives have thus recused themselves from voting on the outcome of the deal.