Tesla Motors Inc. announced on June 21 that it has offered to buy SolarCity Corp in a $2.8 billion deal that would merge two companies driven by billionaire Elon Musk.
Musk, who is the chairman of SolarCity and CEO of Tesla, is the largest shareholder of both companies owning 22 percent of the rooftop solar company and 21 percent of the electric car producing firm.
The offer to buy SolarCity would create a company with nearly 30,000 employees. Moreover, if approved, the acquisition would see Tesla becoming more than just an electric car company, but a diverse firm with an interest in a range of green technologies.
"Tesla's mission has always been tied to sustainability," Tesla said. "Tesla customers can drive clean cars and they can use our battery packs to help consume energy more efficiently, but they still need access to the most sustainable energy source that's available: the sun."
The two companies are already engaged in a number of several partnership deals. Tesla, for instance, produces battery packs for SolarCity, which sells or leases its solar system to residential homes, the military and big business such as Intel, Wal-Mart and Walgreen.
The energy services provider, on the other hand, provides solar panels to Tesla's car-charging stations.
The merger, however, would package the two companies' products and services. The new company, whose products will be renamed Tesla, would sell electric cars, home batteries and solar system all at once.
It would allow customers to generate solar power from rooftop installations, store the energy in batteries and transfer the energy to electric cars.
"Instead of making three trips to a house to put in a car charger and solar panels and battery pack, you can integrate that into a single visit," Musk said. "It's an obvious thing to do."
The billionaire said that he has always considered Tesla not as a car company but one that is focused on sustainable energy.
He said that the world does not need another automotive company but sustainable energy companies, albeit he admitted not knowing how many of Tesla's customers already have or are interested in solar power.
SolarCity CEO Lyndon Rive acknowledged that there are tremendous synergies between Tesla and his company, and expressed his excitement over the potential merger.
Rive, who is also Musk's cousin, however, told SolarCity employees that the shareholders will decide and that he is recusing himself from the decision-making process.
