Tesla Seeks to Acquire SolarCity, Create Clean Energy Company Offering "End-to-End" Solutions
June 22,2016
Tesla announced that it has made an offer to acquire SolarCity.
Tesla said that, under such combination which would add distributed solar to Tesla's existing EV, EV charging, and home electricity storage lines, "We would be the world’s only vertically integrated energy company offering end-to-end clean energy products to our customers."
"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," Tesla said
Tesla proposed an exchange ratio of 0.122x to 0.131x shares of Tesla common stock for each share of SolarCity common stock. This proposal represents a value of $26.50 to $28.50 per share, or a premium of approximately 21% to 30% over the closing price of SolarCity’s shares, based on the June 20 closing price of SolarCity’s shares and the 5-day volume weighted average price of Tesla shares. That equates to about a $2.6 billion valuation of SolarCity
Elon Musk, who has ownership in and serves as director at both companies, has recused himself from voting on the proposal at the Tesla board meeting at which it was approved, and will recuse himself from voting on the proposal at the SolarCity board as well