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Tesla to buy SolarCity in $2.6 billion stock deal

  • Published at 06:24 pm August 1st, 2016
  • Last updated at 08:58 pm August 1st, 2016
Tesla to buy SolarCity in $2.6 billion stock deal
Tesla Motors Inc (TSLA.O) said it would buy solar panel installer SolarCity Corp (SCTY.O) for $2.6 billion in shares to form a one-stop clean energy shop. The deal is a major part of Tesla Chief Executive Elon Musk's master plan "part deux" that calls for the company to offer consumers a single source of hardware to power a low-carbon lifestyle. The combined entity will offer consumers solar panels, home battery storage systems and electric cars under a single brand. Musk is also chairman and a major shareholder in SolarCity. Tesla had made an offer to buy SolarCity in June, but a deal was not certain because SolarCity had formed a special committee to review the offer. The companies said SolarCity stockholders would receive 0.110 Tesla common shares for every share held, valuing SolarCity at $25.37 per share based on the 5-day volume weighted average price of Tesla shares as of Friday. Based on Tesla's Friday close, the offer works out to $25.83 per share - a 3.4% premium to SolarCity's last closing price. SolarCity's shares, which had risen about 26% since Tesla first made the offer on June 21, were down 3.75% at $25.70 before the bell on Monday. Tesla shares were up 0.51% at $235.99. In June, Tesla offered 0.122 to 0.131 of its shares for each SolarCity share. The deal includes a "go-shop" provision that will allow SolarCity, which had market value of $2.62 billion as of Friday close, to solicit offers from other buyers through Sept. 14. Up to Friday's close, Tesla shares were up 7% since the company first announced the offer.