Tech

It's A Deal! Tesla And SolarCity Merger Approved

By Edge Ison , Nov 18, 2016 04:17 AM EST
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The votes are in and the winner is... Elon Musk!

Shareholders of Tesla Motors Inc. and SolarCity Corp. have decided through voting to push through with the merger.

The result of the voting was relayed through an official statement from Tesla which read:

"Tesla's shareholders have overwhelmingly approved our acquisition of SolarCity. Excluding the votes of Elon and other affiliated shareholders, more than 85% of shares voted were cast in favor of the acquisition. With SolarCity's shareholders also having approved the acquisition, the transaction will be completed in the coming days."

As mentioned, over 85 percent of the shareholders favored the deal, valued at $2.6 billion, involving Tesla's purchase of SolarCity but that figure didn't include Elon Musk, the Tesla CEO and SolarCity chairman who is a major shareholder in both companies. Antonio Gracias and J.B. Straubel also recused themselves from both votes. Gracias, founder and CEO of Valor Equity Partners, is a member of the board in both companies. Staubel is the CTO of Tesla while also sitting on the Board of Directors of SolarCity.

When the deal was made on June 21, not everyone viewed it as a brilliant move. In fact, both companies took a hit. Tesla lost an estimated $4.8 billion in market capitalization while SolarCity saw its value drop by $86 million. Leading to the vote, however, Tesla rose 2.6 percent to $188.66 while SolarCity gained 2.9 percent to $20.40, according to Bloomberg.

But now that the merger has been voted upon, Tesla sees an additional $1 billion in revenue upon the entry of SolarCity. Tesla also forecasts around $500 million in cash will be added to its balance sheet in the next three years.

Tesla has been making moves in anticipation of the merger. Musk unveiled the Solar Roof in late October and established a partnership with Samsung last month to produce solar panels.

SolarCity was founded by Peter and Lyndon Rive who happens to be cousins of Musk.

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