The billion-dollar Tesla SolarCity merger is (El)on
Green energy firm SolarCity has accepted a $2.6bn all-stock takeover deal from Elon Musk's Tesla.
Both companies' stocks dipped on the news, with SolarCity's closing down 7.4 per cent to $24.72, while Tesla's share closed down two per cent at $230.01.
SolarCity's stock also took a five per cent dive this morning after it snuck out a downgrade in its full-year guidance at the same time the deal was announced.
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The deal, which Musk has called a "no-brainer", would combine the creator of green energy via solar panels with a company which makes electric cars.
Entrepreneur Elon Musk founded both companies, is chief executive of Tesla in addition to being chairman and a major shareholder in SolarCity, however, the deal was approved by board members of SolarCity not including Musk and other executives with ties to Tesla.
But, there is a provision in the agreement which allows a window for further bids from other potential buyers until 14 September.
The deal, if no other bids are made, is expected to close by the end of the year.
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In separate figures released at the same time as the deal was announced, SolarCity revealed preliminary earnings for the second quarter in which it lowered guidance for the installation of panels.
Installed megawatts was ahead for the quarter – 201mw versus 185mw forecast – however, residential installations are still lower across the first half, resulting in guidance of between 900mw and 1,000mw for the year, down from between 1,000mw and 1,100mw.
The full quarterly figures will be reported on 9 August, while Tesla's earnings for the second quarter are due on 3 August.
The combination of the two companies is part of Musk's masterplan "part deux", which included plans for a "solar-roof-with-battery product".