Tesla and SolarCity Close Deal on $2.6 Billion Merger

Entrepreneur and Tesla CEO Elon Musk (Eric Piermont/AFP/Getty Images)
Entrepreneur and Tesla CEO Elon Musk (Eric Piermont/AFP/Getty Images)

Electric carmaker Tesla and leading rooftop solar installer SolarCity announced Monday that they had agreed to a $ 2.6 billion merger, moving to create a company that combines household renewable energy, battery storage and cars that are able to run on it.

“Solar and storage are at their best when they’re combined,” the companies said in a joint statement. The original offer by Tesla to purchase SolarCity was announced in June.

Elon Musk, chief executive of Tesla, is also chairman of Solar City. The deal will be all stock, in which SolarCity shares are valued at $ 25.37 and shareholders receive 0.11 shares of Tesla for each of their SolarCity shares. It would close in the final quarter of 2016 and is subject to regulatory approval and votes by shareholders.

The companies said they could reap the benefits of $150 million in cost synergies in the first year after the deal closes.

“This is really all part of solving the sustainable energy problem,” Musk said on a conference call Monday. “That’s why we’re all doing this, is to try to accelerate the advent of a sustainable energy world, and I think this is an important step in that direction.”

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