Tesla was looking into a possible acquisition of SolarCity and it finally sent out a confirmation today. The electric car manufacturer has announced its intention to acquire SolarCity for $2.6 billion. The company says that this acquisition will enable both of them to scale their solar and battery operations with Tesla describing the combined entity as “the world’s only vertically integrated sustainable energy company.”
Tesla has also said that acquiring SolarCity will enable it to develop “fully integrated residential, commercial and grid-scale products” which will be used for generating, storing and distributing solar power.
The electric car company has announced an all-stock $2.6 billion offer for SolarCity, stockholders in the solar energy company will receive 0.110 common Tesla share per SolarCity share that they own. SolarCity’s stock has been valued at $25.37.
It’s interesting to note that Tesla co-founder and CEO Elon Musk is the chairman of SolarCity and he also happens to be the largest individual shareholder of both SolarCity and Tesla. Moreover, SolarCity CEO Lyndon Rive happens to be Musk’s cousin. According to Reuters, due to the potential for a conflict of interest, Musk, Rive and several other Tesla and SolarCity executives have recused themselves from voting on the deal.
Tesla is going to have to wait before this deal can be completed because it includes a 45 day “go-shop” clause which effectively allows SolarCity to consider any and all alternative offers until September 14th, 2016. Tesla remains confident that it will be able to close this deal in the fourth quarter of this year.