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Tesla Motors has reached a deal to acquire SolarCity Corp, Tesla announced today following weeks of negotiations and investor scrutiny.
Tesla will purchase SolarCity for $2.6B, or $25.83/share, and business magnate Elon Musk—who owns a more than 20% stake in both companies and is CEO of Tesla—will proceed with his plans to combine the electric car and solar energy companies if the deal is approved by shareholders.
Wall Street has been critical of the deal due to conflict-of-interest concerns, and Tesla’s shares dropped 10% when the potential merger was announced. But Musk has been courting top shareholders in both companies in hopes of persuading them of the benefits, and he is confident shareholders will approve, the Wall Street Journal reports.
“It’s really all part of solving the sustainable energy problem,” Musk said. “That’s why we are all doing this, to accelerate the advent of a sustainable energy world.”
In the long term, Musk’s vision is to establish an entity that sells both solar energy systems and electric cars from the same retail stores. The deal is expected to close in the fourth quarter, and if either company backs out it owes $78.2M in termination fees to the other. [WSJ]
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