SolarCity And Tesla Agree On $2.6B Solar-Plus-Storage Merger

Posted by Joseph Bebon on August 01, 2016 1 Comment
Categories : Featured, New & Noteworthy

In order to establish what the two call “the world’s only vertically integrated sustainable energy company,” Tesla and SolarCity have come to terms on a multibillion-dollar merger deal.

According to a joint blog from the companies, the electric vehicle and battery maker will acquire the residential solar provider in an all-stock, $2.6 billion deal. In addition, stockholders of SolarCity will get 0.110 Tesla common shares for each SolarCity share, the companies say, adding that SolarCity common stock is placed at a $25.37 value per share (lower than the previously predicted $26.50-$28.50 value).

Additionally, per the agreement, SolarCity will be able to “solicit alternative proposals” until Sept. 14, according to their announcement.

“Solar and storage are at their best when they’re combined,” the companies explain in the blog. “As one company, Tesla (storage) and SolarCity (solar) can create fully integrated residential, commercial and grid-scale products that improve the way that energy is generated, stored and consumed.”

Specifically, the blog adds, the merger will create “an aesthetically beautiful and simple one-stop solar + storage experience: one installation, one service contract, one phone app.”

The companies anticipate that the deal will become official in the fourth quarter of this year after they receive both regulatory and shareholder approval. After the first full year of operations as a joint company, they expect “cost synergies of $150 million.”

However, billionaire business mogul Elon Musk – who heads Tesla as CEO and SolarCity as chairman – calls $150 million “conservative” and expects to “significantly exceed” that estimate, according to a Wall Street Journal report.

Musk reportedly called the transaction a “no-brainer” back in June, when Tesla first put the deal on the table. Moreover, in a recent blog, he said an integration of energy storage and rooftop solar is part of his “master plan.”

Comments

  1. The Philippine Solar Industry has been growing rapidly and continues to show strong upward trajectory. Shortage in electricity supply is a constant deepening concern, exacerbated by country’s seemingly unabated rapid economic expansion, the users, that is continuing to pull up electricity rate to be one of the highest (2nd) in Asia and Australasia.

    One of the critical success factors in the Philippines continuing economic growth is the advent of a rapid expansion in industrialization, specifically 24/7 manufacturing. The latter is led by the ever growing influx of international manufacturing facilities, new and old. Majority of the old established ones are relocating from China into the Philippines. There literally in the hundreds and growing.

    Strong demand for electricity consumption, dwindling supply. Electricity rate being the 2nd highest in Asia rendered its cost as one of the major operating expenses. Solar as the name indicates, generates electricity only during the day. 24/7 manufacturing operation raises the bar to even higher level of potentials for “storage system”

    Built in financing would be the key critical success factor in marketing. A target of 25 companies a quarter with 75% success, brings about 18 new customers quarterly at the rate of 1.0 megawatt per customer equates to 72 MW a year. That is, during daytime and an additional 50% during nighttime usage, or 100MW. The target customers would be A and B credit-rated with proven profitable operations forming the would be future portfolio.

    Storage is the future….potential in the Philippines is greatest….are you ready to venture in our neck of the woods…..let’s take the position, get set and start the ball rolling!!!!!

    Leonardo A. Tee
    President & CEO
    SOL-TIERRA ENERGY CORPORATION
    100 Angeles St., Alabang Hills Village
    Muntinlupa City 1771, Philippines
    Tel. +632 905 5158; Mobile: +63917 825 5512
    email: dingtee123@gmail.com

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