Tesla Motors says it will buy solar panel installer SolarCity for $2.6 billion in shares to form a one-stop clean energy shop.
The deal is a major part of Tesla (TSLA) chief executive Elon Musk’s master plan “part deux” that calls for the company to offer consumers a single source of hardware to power a low-carbon lifestyle.
The combined entity will offer consumers solar panels, home battery storage systems, and electric cars under a single brand.
Musk is also chairman and a major shareholder in SolarCity (SCTY).
Tesla had made an offer to buy SolarCity in June, but a deal was not certain because SolarCity had formed a special committee to review the offer.
The companies said SolarCity stockholders would receive 0.110 Tesla common shares for every share held, valuing SolarCity at $25.37 per share based on the five-day volume weighted average price of Tesla shares as of Friday.
Based on Tesla’s Friday close, the offer works out to $25.83 per share—a 3.4% premium to SolarCity’s last closing price.
SolarCity’s shares, which had risen about 26% since Tesla first made the offer on June 21, were down 3.75% at $25.70 before the bell on Monday. Tesla shares were up 0.51% at $235.99.
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In June, Tesla offered 0.122 to 0.131 of its shares for each SolarCity share.
The deal includes a “go-shop” provision that will allow SolarCity, which had market value of $2.62 billion as of Friday close, to solicit offers from other buyers through Sept. 14.
Up to Friday’s close, Tesla shares were up 7% since the company first announced the offer.