Tesla, SolarCity Close To Finalizing Deal
A month ago, Tesla made a stock offer of $2.8 billion to purchase and merge with SolarCity. Unnamed sources with information about the deal told Reuters that the two companies have moved forward on negotiations. The deal could be official in the coming days, however, there is still a possibility of continued negotiations. But given the family closeness between the two companies, the only talks at the highest level, have most likely been centered how to convince the public and shareholders to approve the offer.
Tesla CEO Elon Musk has the largest stock presence in both companies, so he will not be voting on the deal. It was also reported that many other top executives at both companies will not partake in the vote. Musk’s cousins, Lyndon Rive, SolarCity CEO, and Peter Rive, SolarCity board member, have also been removed from the voting process.
Musk is hoping that the deal will work out as part of his “Master plan”. The combined companies would form a single “clean energy shop” with solar panels, home batteries, and electric cars, all under the Tesla name. The CEO said he is planning to create a:
“smoothly integrated and beautiful solar-roof-with-battery product.”
“We can’t do this well if Tesla and SolarCity are different companies, which is why we need to combine and break down the barriers inherent to being separate companies.”
SolarCity has yet to come forward publicly beyond its initial response that it was forming a special board committee to research the proposal. Two board members were to be meeting with lawyers and financial advisers to consider the option, among other possibilities.
One reported idea was that SolarCity would request for Tesla to allow it to keep options open following a tentative merger, until an undisclosed amount of time had passed, during which other buyers could bid. No information was provided as to whether or not this option will be accepted.
Those divulging the information asked to remain anonymous and neither Tesla nor SolarCity were available for comment.