Rivers, Bolts see path to playoffs despite 0-4 start

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Rivers, Bolts see path to playoffs despite 0-4 start

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Tesla Motors Inc. said it would buy solar panel installer SolarCity Corp. for $2.6 billion in shares to form a one stop clean energy shop.

The combined entity will offer consumers solar panels, home battery storage systems and electric cars under a single brand. "Solar and storage are at their best when they're combined," the companies said in a blog post on Tesla's website.

Tesla expects to achieve "significant" cost savings and "dramatic improvements" in manufacturing efficiency as a result of the acquisition of solar panel installer SolarCity, Tesla CEO Elon Musk said today.

He said the combined companies will have a "stronger balance sheet," but likely will require a "small equity capital raise" next year. rams shop Both companies have been burning through cash and have projected achieving positive cash flow later this year.

Tesla and SolarCity expect to save $150 million in costs in the first full year after the deal closes as the combination would improve manufacturing efficiencies and reduce customer acquisition costs. Musk said he thought the combined companies could "significantly exceed" that mark in the first year.

Combining the electric car maker with the solar panel installer is a major part of Musk's strategy, who earlier in July unveiled his "Master Plan, Part Deux" that calls for the combined company to offer consumers a single source of hardware to power a low carbon lifestyle.

Musk is CEO of Tesla, chairman of SolarCity Wholesale Kids and Youth Seattle Seahawks Jerseys and the biggest shareholder in both companies. A merger agreement had not been certain because SolarCity formed a special committee to review Tesla's offer independent of the influence of Musk and other executives close to him.

Under the agreement, Tesla would hold 93.5 percent of the combined companies and SolarCity 6.5 percent. The deal is expected to win approval in the fourth quarter, the companies said.

The deal includes a "go shop" provision that will allow SolarCity, which had market value of $2.62 billion as of Friday close, to solicit offers from other buyers through Sept. 14.

Musk has argued that combining Tesla with SolarCity will allow the combined company to reach consumers more effectively, installing solar panels on their roofs, sending power to Tesla storage batteries in their homes, and Tesla cars in their garages. Batteries from Tesla's $5 billion gigafactory outside Sparks, Nev., will be central to the combined enterprises.

Tesla shareholders have gradually warmed up to the deal with SolarCity following initial apprehension after Tesla announced its offer on June 21. After dropping to below $190 per share following the offer, Tesla shares have recovered and ended trading on Friday at $234.79. SolarCity shares closed at $26.70 Friday.

Besides Musk, several Tesla and SolarCity executives, including Musk's giant store cousins, SolarCity CEO Lyndon Rive and SolarCity board member Peter Rive, have recused themselves from voting their shares when the deal comes to a vote.

Tesla is scheduled to release its second quarter results on Aug. 3.

The company said earlier this month that its deliveries for the quarter fell short of its forecasts. Analysts will be looking for signs that the company is containing its costs and slowing its cash burn.

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