Tesla announced Monday that it has reached an agreement with SolarCity to purchase the solar power systems company in an all-stock transaction for $2.6 billion. The deal is expected to be finalized by the end of 2016.
The deal is part of Tesla CEO Elon Musk’s “Master Plan: Part Deux,” which aims in part to provide an energy solution that combines solar roofs seamlessly with battery storage to provide power to both a home and an electric vehicle.
By combining Tesla and SolarCity, the electric vehicle manufacturer can work toward its goal of creating fully integrated residential, commercial and grid-scale products that improve the way energy is generated, stored and consumed. SolarCity’s solar panels will work in conjunction with Tesla’s Powerwall and Powerpack stationary storage products to provide customers with a one-stop solar and storage service. Tesla’s Powerwall and Powerpack will provide energy both to a home or business in addition to being used to recharge an electric vehicle.
The all-stock transaction has an equity value of $2.6 billion based on the five-day volume-weighted average price of Tesla shares as of July 29. SolarCity stockholders will receive 0.110 Tesla common shares per SolarCity share. Tesla expects the transaction to close in the fourth quarter of 2016. Before then, the deal must be approved by a majority of Tesla and SolarCity shareholders.