Tesla purchases SolarCity in $2.6 billion all-stock deal

Written By: Stratton Report
August 1, 2016

Tesla

On August 1, Tesla announced an agreement to merge with SolarCity.

The all-stock transaction had an equity value of approximately $2.6 billion with SolarCity stockholders receiving 0.110 Tesla common shares per SolarCity share. SolarCity has a 45-day “go-shop”period which runs through September 14, 2016 to solicit alternative proposals.

The EV manufacturer emphasized that its goal is to create fully integrated residential, commercial and grid-scale products, with Tesla about to ramp up production of its Powerwall and Powerpack stationary storage products and SolarCity is getting ready to offer what Tesla described as “next-generation differentiated solar solutions.”

Per Tesla, the merger will facilitate cost synergies of $150 million in the first full year after closing, and allow SolarCity to leverage Tesla’s 190-store retail network and international presence.

Tesla’s financial advisor was Evercore, and Wachtell, Lipton, Rosen & Katz was its legal advisor. The financial advisor to the special committee of SolarCity’s board of directors was Lazard and its legal advisor was Skadden, Arps, Slate, Meagher & Flom.