Tesla, the American automotive and energy storage company has made an offer to acquire SolarCity at a cost of of $2.78 billion.
Solarcity was confounded by Elon Musk nine years ago designs, finances, and installs solar power systems.
According to a blog post announcing the deal, Tesla says it has offered to buy the company for “approximately 21% to 30% over the closing price of SolarCity’s shares.” SolarCity closed the day with a market cap of $2.14 billion — a 30 percent premium could mean an all-stock purchase price of $2.78 billion, or from $26.50 to $28.50 per share.
The blog post went on to say that a combination of Tesla and SolarCity would provide the following significant benefits to shareholders, customers and employees.
- We would be the world’s only vertically integrated energy company offering end-to-end clean energy products to our customers. This would start with the car that you drive and the energy that you use to charge it, and would extend to how everything else in your home or business is powered. With your Model S, Model X, or Model 3, your solar panel system, and your Powerwall all in place, you would be able to deploy and consume energy in the most efficient and sustainable way possible, lowering your costs and minimizing your dependence on fossil fuels and the grid.
- We would be able to expand our addressable market further than either company could do separately. Because of the shared ideals of the companies and our customers, those who are interested in buying Tesla vehicles or Powerwalls are naturally interested in going solar, and the reverse is true as well. When brought together by the high foot traffic that is drawn to Tesla’s stores, everyone should benefit.
- We would be able to maximize and build on the core competencies of each company. Tesla’s experience in design, engineering, and manufacturing should help continue to advance solar panel technology, including by making solar panels add to the look of your home. Similarly, SolarCity’s wide network of sales and distribution channels and expertise in offering customer-friendly financing products would significantly benefit Tesla and its customers.
- We would be able to provide the best possible installation service for all of our clean energy products. SolarCity is the best at installing solar panel systems, and that expertise translates seamlessly to the installation of Powerwalls and charging systems for Tesla vehicles.
- Culturally, this is a great fit. Both companies are driven by a mission of sustainability, innovation, and overcoming any challenges that stand in the way of progress.