Elon Musk is combining his electric car and solar energy companies.
Tesla Motors Inc. on Monday said it had reached a deal to buy SolarCity Corp., the next step in Elon Musk’s plan to combine his electric-car and solar-energy companies.
The all-stock deal values SolarCity at about $2.6 billion, with SolarCity stockholders receiving 0.11 share of Tesla for each share of SolarCity, valuing them at $25.83 apiece, according to Friday’s closing prices.
The deal’s value comes in lower than the original range of $26.50 to $28.50 per share Tesla had proposed in June. Mr. Musk said Monday he wasn’t involved in talks about the valuation of the purchase.
“I know about as much as you do about how the price was obtained,” he said to an analyst on a conference call. Mr. Musk and other key members of the boards of both companies recused themselves from the analysis of the deal.
The deal, if it is approved by shareholders, would double Tesla’s workforce to nearly 30,000 employees and create a unique combination of solar, storage and transportation. The new company would tie up two-money losing entities, dependent on borrowing from the market together, adding potential for risk along with its opportunity to vertically integrate its products.
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