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Tesla Completes Acquisition of SolarCity, Forming a Clean Energy Empire

published: 2016-11-24 15:51

Tesla announced the completion of its acquisition of SolarCity on November 21st after 85% of shareholders from SolarCity voted in favor of Tesla. This will allow Elon Musk, CEO of Tesla, to have a more complete integration for his clean energy business.

Musk, CEO of Tesla and Chairman of SolarCity, is also the largest shareholder of the two companies, according to Wall Street Journal. He plans to combine PV technology with energy storage batteries, allowing clients to use cleaner energy and charge electrical vehicles (EVs) using these clean energy. With slight twists and turns, the shareholders finally agreed There were a lot of disputes when Musk first proposed to acquire SolarCity this June. Tesla’s stock even plugged 10% the next day. It’s mainly due to SolarCity’s poor cash flow and debt problems, followed by the concern of how will they manage the company as SolarCity’s chief executive is Musk’s cousins – Lyndon and Peter Rive. Tesla reported 3Q16 earnings this October. The net income reached US$ 22 million, with the net cash flow reaching US$ 176 million, a significant rise from 2Q16. Tesla pointed out that they will work hard to achieve the goal of shipping out 50,000 units of EVs in 2H16, therefore they may witness continuous growth in 4Q16. In November, Institutional Shareholder Services (ISS), a corporate governance consulting firm, indicated it’s in favor of Tesla's US$ 2.3 billion acquisition of SolarCity, making Tesla a more integrated clean energy company. In addition, Tesla recently launched solar roofs, which further convinced the shareholders their abilities to integrate PV technology. Finally, a majority of shareholders agreed with the acquisition on the shareholder meeting on November 17th and the acquisition was announced in the morning of November 21st.

(Photo Credit: Web Summit via Flickr shared by CC 2.0)

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