A couple of months ago, Tesla Motors wanted to combine its electric-car with solar-energy companies and hence sent a proposal to SolarCity in June. And now, these two companies announced an agreement to work together.
Tesla and SolarCity can create fully integrated residential, commercial and grid-scale products that improve the way that energy is generated, stored, and consumed so that Solar and Storage will work best when they get combined.
The deal is a major part of Tesla Chief Executive Elon Musk’s master plan “part deux” that calls for the company to offer consumers a single source of hardware to power a low-carbon lifestyle. The combined entity will offer consumers solar panels, home battery storage systems, and electric cars under a single brand.
“Tesla is ready to scale our Powerwall and Powerpack stationary storage products and SolarCity is getting ready to offer next-generation differentiated solar solutions.”
Companies are assuring the end users that it will try it best to save customers money by lowering hardware costs, reducing installation costs, improving manufacturing efficiency, and reducing customer acquisition costs.
The all-stock deal values SolarCity at about $2.6 billion, with SolarCity stockholders will receive 0.11 shares of Tesla for each share of SolarCity, valuing them at $25.83 a piece, according to Friday’s closing prices. The deal’s value comes lower than the range of $26.50 to $28.50 per share that Tesla had proposed in June.
This new deal, when executed, will double Tesla’s workforce to nearly 30,000 employees and create a unique combination of solar, storage and transportation.
“It’s really all part of solving the sustainable energy problem, That’s why we are all doing this to accelerate the advent of a sustainable energy world.”
-said Mr. Musk
As per the information from other sources, if either company backs out of the deal without another offer in place, it would owe the other a $78.2 million termination fee; if SolarCity terminates the tie-up to enter into another merger before the expiration, the go-shop period, the termination fee owed to Tesla will be $26.1 million.
Tesla will provide second-quarter financial results on Wednesday after the market closes.