Tesla, SolarCity set to announce merger combining clean energy cars and solar panels - sources

The move is seen as part of Elon Musk's strategy for his electric car business

Hazel Sheffield@hazelsheffield
Monday 01 August 2016 17:10
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Elon Musk is both the chief executive of Tesla and the chairman of SolarCity
Elon Musk is both the chief executive of Tesla and the chairman of SolarCity

Tesla Motors, the clean energy car maker founded by Silicon Valley billionaire Elon Musk, could be about to announce a merger with SolarCity, a solar panel installer that has dominated the Californian residential solar panel market since 2007.

Any deal would have to win the backing of shareholders from both companies.

The move is seen as part of Musk's strategy for his electric car business. He has previously unveiled a master plan "part deux" calling for a combined company to offer customers a single source of hardware for a low-carbon lifestyle.

Musk is both the chief executive of Tesla and the chairman of SolarCity, which was founded at his suggestion by his cousins Peter and Lyndon Rive. He is also the biggest shareholder in both companies. But the merger could still hit opposition from a special committee, formed to review Tesla's offer for SolarCity independently of Musk and his team.

As part of the deal, SolarCity is expected to continue to court offers from competing companies for a short period of time after the merger has been signed.

The amount Tesla would pay for SolarCity could not be gleaned, but it had previously offered 0.122 to 0.131 of its shares for each SolarCity share.

SolarCity has a market capitalisation, or the total value of all of its shares, of $2.6bn (£1.7bn), while Tesla's market capitalisation is a whopping $34.6bn.

Musk has said the combination will benefit consumers, who should then be able to install solar panels on their roofs, send power to Tesla storage batteries in their homes and to Tesla cars in garages.

Tesla is also reportedly considering creating a fleet of self-driving cars for ride-sharing services, which could rival Uber and Lyft.

Additional reporting by Reuters

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