US solar provider SolarCity has agreed to a $2.6 billion buyout offer from Tesla Motors as part of billionnaire entrepreneur Elon Musk’s plan to create a one-stop-shop for clean energy products.
The offer values SolarCity at $25.37 per share, based on the five-day volume-weighted average price of Tesla shares as of 29 July. The all-stock transaction is lower than the offer Tesla first proposed on 21 June for $26.50 to $28.50 per share. SolarCity stockholders will receive 110 Tesla common shares per SolarCity share.
The deal also includes a 'go-shop' provision that will allow SolarCity to consider offers from potential buyers for 45 days through 14 September.
Acquiring SolarCity, one of the largest solar providers in the US, is part of a plan by Musk, Tesla’s chief executive, to create what he calls a “vertically integrated sustainable energy company”. His goal is to create a business that combines SolarCity’s solar panels with Tesla’s energy storage systems and battery powered cars.
“Solar and storage are at their best when they’re combined,” the two companies said in a joint statement. In their view, Tesla and SolarCity “can create fully integrated residential, commercial and grid-scale products that improve the way that energy is generated, stored and consumed”.
The two companies said they expect to save a combined $150 million in the first full year by improving manufacturing efficiency.
Tesla’s stock price was down 2 percent at the end of trading on Monday. SolarCity’s was down 7.4 percent.