Tesla’s shareholders overwhelmingly approved a merger with SolarCity today, opening the way for consummating the marriage of the electric-car company and the solar-panel venture within days.
The vote was more than 85 percent in favor, excluding the shares held by billionaire Elon Musk and other executives affiliated with the companies, Tesla said in a statement. Musk is the CEO of Tesla as well as the chairman of SolarCity.
Musk and other executives talked up the deal in advance of the vote, saying that it would take advantage of the synergies offered by each company. In addition to manufacturing electric-powered vehicles, Tesla is ramping up production of its Powerwall storage batteries. Meanwhile, SolarCity has become America’s top solar-panel installation company.
Last month, Musk unveiled a line of integrated solar roof panels for new construction as well as a next-generation Powerwall 2 battery for home installation.
Federal regulators and SolarCity’s shareholders previously gave their approval to the merger, leaving today’s vote as the last major hurdle.
Musk tweeted his thanks after the vote’s outcome was announced:
Vote tally shows ~85% of unaffiliated shareholders in favor of the Tesla/SolarCity merger! Thanks for believing.
— Elon Musk (@elonmusk) November 17, 2016
He also thanked shareholders in person during today’s meeting at a Tesla facility in Fremont, Calif..
“I think your faith will be rewarded,” Musk said. “It’s really going to be some amazing stuff that comes out.”
The deal is expected to be worth more than $2 billion, with the precise terms depending on the value of Tesla’s stock when the merger transaction takes effect. “The transaction will be completed in the coming days,” Tesla said.
Neither company has been sustainably profitable, although Tesla posted a profit last quarter. Musk argued that a merger would unlock the potential of both companies and add hundreds of millions of dollars in value. In July, he issued a master plan for a system that he said would empower individuals to become their own electric utilities.
“We can’t do this well if Tesla and SolarCity are different companies, which is why we need to combine and break down the barriers inherent to being separate companies,” he wrote. “That they are separate at all, despite similar origins and pursuit of the same overarching goal of sustainable energy, is largely an accident of history.”
Not all shareholders agreed: Some have filed lawsuits, questioning whether Tesla would really benefit from taking on SolarCity.
Tesla’s shares hit $188.66 at the official close of trading, representing a 2.6 percent gain for the day. SolarCity’s stock rose 2.9 percent to close at $20.40. Further gains were made in after-hours trading.
Update for 11:10 a.m. PT Nov. 18: Musk also happens to be the founder and CEO of SpaceX, a rocket venture that has the long-term aim of helping to make humanity a multiplanet species. Although the Tesla-SolarCity deal has no direct impact on SpaceX, there could be indirect effects.
Musk says he intends to use his personal wealth (currently estimated at $11 billion) on efforts to build a sustainable settlement on Mars. Thus, Tesla-SolarCity’s success could eventually feed into Mars exploration. And going in the other direction, Musk can leverage his stake in privately held SpaceX as a backstop for Tesla-SolarCity if necessary.