Wednesday , 7 December 2016
Breaking News

Tesla, SolarCity Get Approval for Merger

Tesla Motors got approval from investors to combine with SolarCity Corp. in an effort to expand the market for solar power and give electric car owners new options for solar charging.

Shareholders of both companies backed the merger by a wide margin Thursday. Tesla said 85 percent of shareholders who voted approved the deal.

The deal, first proposed by Tesla CEO Elon Musk proposed in June, has had more of a mixed reaction on Wall Street. Analysts wondered why Tesla would want to take on SolarCity while it’s building a big battery factory in Nevada and preparing to launch its first mass-market car, the Model 3, due out at the end of 2017. Shares of both companies dropped in the ensuing months.

There were also complaints of a conflict of interest for Musk. He is the chairman of both companies, and SolarCity is run by his cousins.

But Musk convinced shareholders that the deal was, as he originally stated, “a no-brainer.” Earlier this month, he said SolarCity — the largest home solar panel installer in the U.S. — could add $1 billion in revenue to the combined company next year and could add $500 million in cash to Tesla’s coffers over three years. And at a big party in Hollywood, he unveiled what he hoped would be the combined companies’ first product: glass solar roof panels that look like traditional roof tiles.

“I think your faith will be rewarded,” Musk told shareholders Thursday. He said the solar roof tiles would be ready for installation in large volumes by next summer.

The all-stock deal was worth $2.6 billion when the companies approved it in August, but the final terms will be determined by the value of Tesla shares on the day the merger goes into effect. SolarCity said it expects the deal to close in the coming…

Leave a Reply

Your email address will not be published. Required fields are marked *

*