Here comes the sun: Tesla, SolarCity strike $2.6B merger
August 02, 2016
In July, Elon Musk unveiled his next "master plan" for the future of electric-car company Tesla. On Monday, Tesla set the first phase of that plan into action by striking an all-stock deal to acquire SolarCity at a valuation of about $2.6 billion, bringing the two Musk-founded companies beneath the same corporate umbrella. SolarCity stockholders will receive 0.11 shares of Tesla for each SolarCity share—equivalent to $25.83 apiece. Musk and other members with seats on the boards of both companies reportedly did not participate in the negotiation to avoid a conflict of interest.
The goal of the merger, according to Tesla, is to create "the world's only vertically integrated sustainable energy company." By combining SolarCity's solar offerings with Tesla's storage and transportation capabilities, Musk hopes to create self-powered, self-driving cars that (eventually, at least) won't break the bank for consumers. Tesla expects the deal to create $150 million in cost synergies during the first year after closing.