The merger between Tesla and SolarCity will reportedly be announced as early as today according to sources that are close to the matter. The bid for SolarCity, a $2.8 billion stock-only deal approved by Tesla’s board of directors, if gone through will allow Tesla to unify design, strategy, and production of sustainable energy products under a single umbrella.
According to a report by Reuters, the announcement of a merger will likely take place before Tesla reports its second quarter results scheduled for this Wednesday, August 3.
Tesla has previously stated that the merger between the two companies would unify the company’s strategy to transition to sustainable energy. “We believe that the possibilities for product, service and operational synergies would be substantial, and that a combination would allow our companies to build on our respective core competencies and remain at the forefront of delivering innovative approaches for sustainable transportation and energy.”, read Tesla’s offering letter for SolarCity.
The merger agreement is said to have a provision that would allow SolarCity to “go-shop” the deal with other takers, thereby allowing the solar company to continue soliciting bids from other potential buyers. If the merger comes to fruition, expect Tesla stores and galleries to become showrooms for Tesla Energy branded energy generation and power storage units. Tesla CEO Elon Musk has made it very clear that one of his priorities is to build “a smoothly integrated and beautiful solar-roof-with-battery product that just works”.
Musk who also happens to be chairman of SolarCity, along with his cousin and other executive members that hold large equity positions within the solar company, have recused themselves from voting on shares when the deal comes to vote.