Tesla makes a bid to buy eco-energy company SolarCity
Tesla has put in an offer to buy the solar panel company, SolarCity, which Elon Musk co-founded nine years ago.
The move, interpreted as an effort by Tesla to bolster its clean-energy business, sees Musk’s company offering an all-stock deal that could amount to $2.8 billion (£1.9 billion).
According to Reuters, Elon Musk described the deal as a “no-brainer”. In a statement, Tesla said the deal would turn it into the “world’s only vertically integrated energy company offering end-to-end clean energy products”.
Tesla is primarily known for producing electric cars, but the company also creates home-powering batteries such as the Tesla Powerwall 2. Providing solar energy to power its batteries is a logical move, although given Musk’s role as chairman for SolarCity, there’s a question over why Tesla needs to buy SolarCity rather than closely collaborate.
The answer could be that Musk simply wants to consolidate his two firms. There are suggestions, however, that Tesla is bailing out SolarCity, which according to Reuters has around $6.24 billion in liabilities, including debt.
Tesla said in its statement that it would offer to buy the company for “approximately 21% to 30% over the closing price of SolarCity’s shares”. SolarCity closed with a market cap of $2.14 billion, with a 30% premium lifting the bidding figure to just under $2.8 billion.
SolarCity’s stock has since jumped by over 22%, while Tesla’s has fallen more than 8%.
You can read Tesla’s public offer letter in full here.