Tesla Motors Inc (NASDAQ:TSLA) and SolarCity Corp (NASDAQ:SCTY) have announced through a filing with the US Securities and Exchange Commission on Wednesday that their shareholders are expected to vote on a proposed merger on November 17.
The merger between Tesla and SolarCity was proposed in June and is expected to bring the two companies together to expand their solar energy offerings. Tesla CEO Elon Musk will be at the helm of the merger. The merger is thought to be advantageous for both firms by management because it will help in streamlining their offerings and strengthening their position in the market. The merger is, however, awaiting the shareholder voting process to determine whether it will be approved.
“If shareholders approve the transaction, a combined Tesla, and SolarCity will be able to provide the first ever opportunity to generate, store and consume energy entirely sustainably, through a suite of integrated products that add aesthetics and function while reducing cost,” wrote Tesla on its website.
The merger deal between Tesla and SolarCity is expected to cost $2.6 billion. Some equity analysts and shareholders however have their doubts about the merger but the executives of the two firms believe that it will be a great opportunity for synergy. The deal is part of Elon Musk’s growth vision for his company’s future products including the solar roofing products.
“A combined Tesla and SolarCity will be able to provide the first-ever opportunity to generate, store and consume energy entirely sustainably, through a suite of integrated products that add aesthetics and function while reducing cost,” highlighted Tesla in a blog post.
SolarCity has rocky finances and that is part of the reason some investors are not on board with the idea of the merger. Despite this, Musk is hopeful that the deal will offer significant growth opportunities for both firms.
Tesla stock closed the latest trading session at $201.51 marking a $1.41 or 0.70% improvement compared to the value of the stock at the previous close.