Tesla announced Monday it has proposed a deal to buy solar systems provider SolarCity for $2.6bn.
Tesla said the deal would give the combined companies the ability to create "fully integrated residential, commercial, and grid-scale products that improve the way that energy is generated, stored and consumed".
Simply put, Tesla wants to move beyond electric vehicles to become a renewable-energy products company. The idea is to use Tesla's range of energy storage products to store energy generated from SolarCity's solar panels, thereby creating a one-stop shop for renewable energy purchasing, installation, and management.
"This is really all part of solving the sustainable energy problem," Tesla CEO Elon Musk said on a conference call.
Tesla first tried to buy SolarCity in June, but the deal sparked scrutiny from Wall Street and concerns over Musk's personal ties to SolarCity. In addition to his role with Tesla, Musk is also the chairman and largest individual shareholder of SolarCity. What's more, SolarCity's CEO, Lyndon Rive, is Musk's cousin.
For these reasons, Musk attempted distance himself from the specifics of the deal, telling analysts on the conference call he was "fully recused from the matter".
SolarCity gets 45 days to seek a higher bidder in a process known as a "go-shop" period. Tesla says it's confident the deal will close in the fourth quarter of 2016.
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