Tesla to buy SolarCity for $2.6 billion in stock

Tesla is buying SolarCity for $2.6 billion, pushing ahead with Elon Musk’s vision to create a one-stop shop for clean energy.

The all-stock deal will see SolarCity shareholders receive 0.110 Tesla common shares per SolarCity share, valuing SolarCity common stock at $25.37 a share based on the 5-day volume weighted average price of Tesla shares as of July 29, 2016. However, SolarCity shares closed at $26.70 Friday. The bid is lower than the original offer, made in June, of nearly $3 billion.

“Now is the right time to bring our two companies together,” Tesla Motors said in a filing dated Sunday. “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.”

The proposed merger is expected to close in the fourth quarter of 2016, pending shareholder and regulatory approval. The deal also includes a 45-day “go-shop” provision, which allows SolarCity to seek alternative proposals until Sept. 14.

The electric-car maker’s bid for the solar company in June was something of a surprise, and raised conflict-of-interest questions for Musk — chief executive of Tesla and chairman of SolarCity — who’s the largest shareholder of both money-losing companies. Some analysts see it as a Tesla bailout of SolarCity.

The decision to merge was made “after comprehensive due diligence in consultation with independent financial and legal advisors,” according to Tesla’s filing.

For more on this story, go to MercuryNews.com.

[graphiq id=”ki4CWUXp0Ed” title=”TSLA vs SCTY Stock Price Percent Change Over Time – 1 Month” width=”600″ height=”505″ url=”https://w.graphiq.com/w/ki4CWUXp0Ed” link=”http://listings.findthecompany.com/l/12234646/Tesla-Motors-Inc-in-Palo-Alto-CA” link_text=”TSLA vs SCTY Stock Price Percent Change Over Time – 1 Month | FindTheCompany” ]

Photo: SolarCity workers install solar panels on rooftops at Hickam Communities at Joint Base Pearl Harbor-Hickam in 2011. SolarCity has entered into an agreement to merge with Tesla. (Business Wire)

 

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