On Monday, Tesla Motors announced plans to purchase SolarCity. The reason for the announcement is to help urge shareholders, from both companies, to support the deal. In July, Elon Musk laid out a strategy called “part deux,” where the combination of both companies could provide a single source of hardware for living a low-carbon lifestyle. In addition, Elon Musk is the biggest shareholder of both companies. Moreover, the merger may include a go-shop provision that lets SolarCity receive offers from other possible buyers after its signing.
Previously, Tesla said it offered 0.122 to 0.131 of its shares for each SolarCity share. Although the negotiations are currently under wraps, Tesla and SolarCity have market capitalizations of $34.6 billion and $2.6 billion. Musk believes that the merger will allow for more efficient delivery to consumers. The central product will be batteries from Tesla’s Gigafactory outside Sparks, Nevada. As of Friday, Tesla and SolarCity shares ended up trading at $234.79 and $26.70. On Aug. 3, Tesla is set to release its second-quarter results.Opinions expressed here by Contributors are their own.