Tesla And SolarCity Agree On $2.6 Billion Merger To Create Clean Energy Powerhouse

Tesla Motors Inc. is reportedly set to buy solar panel installer SolarCity Corp. with $2.6 billion in shares to create an all in one clean-energy shop. The new acquisition means that electric vehicles, home battery storage systems and consumer solar panels will be available under a single new brand.

"Solar and storage are at their best when they are combined. As one company, Tesla (storage) and SolarCity (solar) can create fully integrated commercial, residential and grid-scale products that improve the way that energy is generated, stored and consumed," a blog post on Tesla's website stated. "By joining forces, we can operate more efficiently and fully integrate our products, while providing consumers with an aesthetically beautiful and simple one-stop solar plus storage experience: one installation, one service contract, one phone app".

The company is expecting both dramatic improvements and major cost savings to the tune of $150 million in the first full year with the new acquisition. Earlier this year in July, Elon Musk CEO of Tesla had revealed a Master Plan, Part Deux that aimed to provide consumers with a single source of hardware to fuel a lifestyle centered on low carbon lifestyle. Incidentally, Musk is the biggest shareholder in both Tesla Motors Inc. and SolarCity Corp.

As per reports, until now there was no certainty of a merger agreement because SolarCity had made a special committee to review the offer of Tesla devoid of Musk's influence or other executive members close to him. Now, with the merger, Tesla will own 93.5 percent of the combined companies and 6.5 percent will be held by SolarCity. The deal is expected to go through in the fourth quarter, and the shareholders of Tesla are reportedly warming up to the idea of the new acquisition after the initial apprehensions. The company also needs regulatory approval and must conform to other closing conditions before going ahead.