Tesla reaches deal to buy SolarCity for $2.6B

NEW YORK, USA – Electric car maker Tesla said on Monday, August 1, it won agreement from SolarCity to acquire the solar company for $2.6 billion, confirming a deal that has been criticized on Wall Street.

Tesla announced the bid in late June, but it drew jeers on Wall Street, in part because of skepticism over the motives of Tesla chief executive Elon Musk, who is also chairman of SolarCity, as well as a major shareholder.

Some analysts also questioned whether the deal would divert Tesla’s attention from an ambitious plan to significantly expand electric-car production in the next few years.

But Tesla said the buyout would enable it to achieve lower hardware costs and boost manufacturing efficiency, creating the “world’s only vertically integrated sustainable energy company.”

“Solar and storage are at their best when they’re combined,” Tesla said.

Under the all-stock deal, SolarCity shareholders will receive 0.110 Tesla common shares.

The agreement allows SolarCity to solicit alternative proposals for 45 days.

SolarCity shares fell 5.5% to $25.23 in pre-market trade, while Tesla rose 0.2% to $235.25. – Rappler.com