Tesla made an offer Tuesday to buy solar energy provider SolarCity in a $2.79-billion deal that would consolidate billionaire entrepreneur Elon Musk’s energy-related businesses.
The move would bring together the stationary power storage business that Tesla has been developing with SolarCity’s expertise in rooftop solar panels. Musk says it would allow one-stop shopping for business and homeowners who want solar power and a battery system to store the energy from sunlight after the sun goes down.
“Painless, easy” and “everything works,” he told reporters. “The timing is driven by the product and providing compelling solutions to customers,” said Elon Musk, chairman of SolarCity and CEO of Tesla and also CEO of SpaceX.
Elon Musk is the largest owner of SolarCity shares, holding 21.8 million shares or 22.2% of the company, according to S&P Global Market Intelligence of of March 31. His stake in the company was worth $478 million. He’s also Tesla’s top shareholder, with 21% of outstanding shares.
Tesla said it offered $26.50 to $28.50 per share for SolarCity, which represents a premium of about 25 percent to 35 percent to the company’s Tuesday close of $21.19. That values the deal at about $2.6 billion to $2.8 billion overall. The proposed exchange ratio is 0.122 to 0.131 shares of Tesla common stock for each share of SolarCity common stock.
In a blog by Tesla, it read;
Tesla’s mission has always been tied to sustainability. We seek to accelerate the world’s transition to sustainable transportation by offering increasingly affordable electric vehicles. And in March 2015, we launched Tesla Energy, which through the Powerwall and Powerpack allow homeowners, business owners and utilities to benefit from renewable energy storage.
It’s now time to complete the picture. Tesla customers can drive clean cars and they can use our battery packs to help consume energy more efficiently, but they still need access to the most sustainable energy source that’s available: The Sun.
The SolarCity team has built its company into the clear solar industry leader in the residential, commercial and industrial markets, with significant scale and growing customer penetration. They have made it easy for customers to switch to clean energy while still providing the best customer experience. We’ve seen this all firsthand through our partnership with SolarCity on a variety of use cases, including those where SolarCity uses Tesla battery packs as part of its solar projects.