After over a month of deliberations, Tesla and SolarCity have agreed to combine, creating the "world's only vertically integrated sustainable energy company," according to a statement released on the Tesla website.
At a $25.83 per share price, SolarCity's shareholders will add 0.11 Tesla shares for each SolarCity share they own. Tesla's initial offer in June specified a range between 0.122 and 0.131 corporate shares for a single SolarCity stock.
The $2.6 billion deal will be conducted between two companies partially owned by Elon Musk, potentially leaving the door open for lawsuits related to conflicts of interest.
Musk owns 23 percent of SolarCity, the United States' biggest supplier of consumer solar energy solutions. SolarCity's C-suite includes Musk as CEO, chairman and co-founder and his two cousins, Lyndon and Peter Rive, as chief executive and chief technology officer, respectively.
Musk denied any instance of the abuse of a conflict of interest in the merger, which he said had been evaluated at SolarCity by a specially convened committee of "independent and disinterested" board members.
Both companies clarified that Musk had not been part of the vote to confirm the merger, which could have become the brunt of lawsuits directed at the two firms.
Musk has previously called the deal a "no brainer" and offered the idea of a package deal in which customers could purchase an electric car, home battery and solar power system at the same time.
While Musk said that Tesla did not know how many customers have solar panels, he said that he suspected that the interest was there.
SolarCity leads the nation in rooftop solar systems for homes, however, it also routinely posts quarterly losses, and has seen its stock plummet almost 60 percent this year.
SolarCity has a 45-day "go-shop" period to solicit deals for more eager buyers, though a withdrawal from the deal would cost executives up to $78.2 million in fees.
By Zainab Calcuttawala for Oilprice.com
More Top Reads From Oilprice.com:
Zainab Calcuttawala is an American journalist based in Morocco. She completed her undergraduate coursework at the University of Texas at Austin (Hook’em) and reports on… More