Daily Management Review

Tesla and SolarCity are on the threshold of merger


07/26/2016


Tesla and SolarCity, engaged in solar power, have got closer to their merger, writes Reuters. At the same time, according to the publication, the negotiations still face a risk to eventually fail.



Dan Taylor, heisenbergmedia.com
Dan Taylor, heisenbergmedia.com
Tesla Motors and SolarCity made progress in their merger deal, told Reuters sources familiar with the situation.

According to them, the companies ate "in the final stages of due diligence." They can reach an agreement in the coming days, although there is a possibility that the talks would fail.

Tesla offered to buy the company SolarCity, which is engaged in solar power systems, at the end of June this year. Asking price is from $ 26.5 to 28.5 per share. Overall, the transaction value amounts to $ 2.86 billion.

Tesla’s founder Elon Musk is Chairman of the board of directors and SolarCity’s major shareholder (22%). He said that shareholders of both companies will vote on the deal; at that, he himself is going to abstain from voting.

According to Musk, the deal will trigger tighter integration between products of both companies. In practice, it means to sell batteries for solar modules in shops of automobile companies.

SolarCity was founded in 2006. The company produces "clean energy, available to homeowners, businesses, schools, nonprofit organizations and government agencies at a price lower than they paid for energy produced by burning fossil fuels such as coal, oil and natural gas", reads the company's website. 

July 20, Tesla founder Elon Musk published the second part of the company’s development plan. The first part was released in 2006 - and Tesla, one way or another, implemented everything promised.

Musk’s entire plan is linked to one idea to reduce mankind’s dependence on hydrocarbons. He is warning that the civilization may collapse if the world does not abandon the non-renewable sources. He is sure: it is not "a stupid idea for hippies", but a life-and-death issue. Tesla plans to create a solar system, which can be placed on the roofs. In fact, the company is planning to develop already existing project Powerwall (domestic solar panels) to make it as convenient and affordable for consumers as possible. Musk believes it is possible only if Tesla allies itself with SolarCity.

It is impossible to say what exactly Musk has got on his mind. He tells about a "product with a solar panel and a battery" (one can only imagine a new category of such all-in-one products that collect and store energy), but his blog speaks for himself. He targets on the existing solar panels, namely on the fact that they are now less "beautiful" or less "striking".

During decades, the solar market players have cluttered our roofs with computer monitors (it seems so). Some like it, some do not. Aaron Dorf, an architect at architecture and design firm Snøhetta, says: "Some people will always welcome techno symbolism of typical solar panels. Eventually, however, it will become a relic of the first generation, like Atari or a car phone." In the near future, said Dorf, installation cost and efficiency of solar cells will cease to be a limiting factor. 

source: reuters.com, teslarati.com






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