Tesla Motors wins shareholders' approval for acquisition of SolarCity Corp
18 November 2016
Tesla Motors Inc chief executive Elon Musk won approval yesterday from shareholders for acquisition of SolarCity Corp, the solar energy system installer in which he is the largest shareholder.
The stock swap deal, worth around $2 billion closes a tumultuous year for Musk and Tesla. The proposed acquisition of SolarCity, which installs residential solar power systems, led to a 13 per cent fall in the share price of Tesla after Musk outlined the deal in June.
According to Tesla, the deal was "overwhelmingly" approved by 85 per cent of unaffiliated shareholders. Shares were up 1.3 per cent in after-hours trade after gaining 2.6 per cent in the regular session to close at $188.66.
"Your faith will be rewarded," Musk told shareholders assembled at the company's Fremont, California, facility.
A federal investigation into the death of a Tesla owner driving his car on Autopilot, a driver assistance system, which came, had come as a setback for Tesla. It had also raised concerns with shareholders of the company that Musk might be overburdened with lofty future goals for Tesla, the work of integrating SolarCity, and his CEO duties at SpaceX.
The shares of the automaker were down nearly 20 per cent for the year, and were further hit with the election of Donald Trump. A key Trump adviser on environmental issues, Myron Ebell, had called for cutting off tax subsidies for electric vehicles.
The merger would create the world's only vertically integrated sustainable energy company. With the combination of the strengths of both companies, Tesla known for producing battery storage products and SolarCity for infrastructure to support mass scale out of solar solutions, the combined entity would be able to develop fully integrated residential, commercial and grid-scale products aimed at improving the generation, storage and consumption of electricity.