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Shareholders approve Tesla $2.1bn buyout of SolarCity

Shareholders of Tesla Motors and SolarCity approved the electric automaker’s offer worth about $2.1bn to acquire the leading US rooftop PV player, a move that entrepreneur Elon Musk asserts will give consumers a one-stop shop for carbon-free energy.

“Your faith will be rewarded,” Musk told Tesla investors following the vote. Tesla said more than 85% of Tesla shares approved the deal, excluding those held by Musk (22% of total outstanding) and “other affiliated shareholders.”

Musk is the largest shareholder in both companies. He also is chief executive of Tesla and chairman of both Tesla and SolaCity, whose shareholders also approved the transaction, according to Tesla. It did not provide details on the SolarCity shareholders’ vote.

In a statement, Tesla said its acquisition will be completed in the “coming days.”

Musk has defended the controversial deal as a money-saver that will create an integrated solution for consumers to generate, store and consume clean energy. Plans call for a suite of products that will include premium electric automobiles, batteries and solar energy, which he believes will add aesthetics and function while reducing cost.

The idea is to leverage SolarCity’s installation network and Tesla’s global footprint in seamless fashion, while feeding both a steady stream of cutting edge products and creating “significant value” for shareholders in the process.

Among those products is a recently unveiled line of innovative building-integrated solar tiles, whose PV cells are embedded and aesthetically pleasing. They were designed jointly by Tesla and SolarCity. Another is Tesla’s second generation Powerwall 2 rechargeable lithium-ion battery for homes an small businesses.

Some analysts have questioned the deal as amounting to a Tesla bailout of SolarCity, which has consistently lost money since it went public in December 2012, including $225.8m last year.

Tesla posted its initial profit in the third quarter - $22m, after almost $1.2bn in net losses in 2014-15.  

 

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