Tesla offers $2.8 billion for SolarCity
SAN FRANCISCO - Electric-car maker Tesla Motors (TSLA) is offering to buy solar-panel maker SolarCity (SCTY) for up to $2.8 billion in an attempt to create a one-stop shop for cleaner energy as consumers become more concerned about fossil fuels hurting the environment.
The all-stock deal announced Tuesday values SolarCity at $26.50 to $28.50 per share, depending on a review of the company's books.
In after-hours trading on Tuesday, SolarCity's stock surged $3.86, or 18 percent, to $25.05, while Tesla's shares sank $27.26, or 12 percent, to $192. SolarCity shares have been beaten down by nearly 59 percent this year. They closed in regular trading on Tuesday at $21.19, down from their 52-week high of $61.72.
The deal still requires shareholder approval. That process could be complicated by Tesla CEO Elon Musk's position as SolarCity's chairman and largest individual shareholder. SolarCity's CEO, Lyndon Rive, is also Musk's cousin.
In its blog post announcing the deal, Tesla said it believes "that a combination of Tesla and SolarCity would provide significant benefits to our shareholders, customers and employees."
Among those cited: "We would be the world's only vertically integrated energy company offering end-to-end clean energy products to our customers. This would start with the car that you drive and the energy that you use to charge it, and would extend to how everything else in your home or business is powered."
Tesla is pursuing SolarCity 14 months after introducing a home battery system that stores solar energy.