And it has finally happened. Contrary to the naysayers within the companies, the Tesla-SolarCity acquisition has garnered enough votes to push ahead. Following a voting process, Shareholders of Tesla Motors Inc. and SolarCity Corp. both approved the merger that will create a single unit selling emissions-free cars and rooftop solar panels .
Speaking on the topic, Tesla CEO Musk said that excluding him and other affiliated shareholders, who had decided to refrain from the voting because of their vested interests in both the companies, the merger still got the approval of an overwhelming 85% of Tesla shareholders. It should be remembered that Musk, who is also the Chairman and largest shareholder of SolarCity, had decided to refrain from the voting process required to approve the deal.
Following the results of the voting, Musk said,
Your faith will be rewarded.
The move will create a company selling both emissions-free cars and rooftop solar panels. The company will also have some of the most state-of-the-art technologies in its possession. The portfolio of products on offer will include all-electric vehicles, solar panels and batteries — providing customers with clean energy solutions for their homes and transport.
The merger certainly took a large effort. After Elon Musk first announced the acquisition, there were rumors that the deal was being pushed ahead in a bid to save provide SolarCity — which was rapidly burning through cash at the time — with a savior. Indeed, with time, a groups of Tesla shareholders violently opposed to the deal came out — a few of whom even brought in lawsuits against the merger. The arguments put forward by this group included an allusion to the rapid rate at which SolarCity has been burning through cash lately. Indeed, many even called the plan a veiled bailout — after all, Musk’s personal fortune would suffer should SolarCity sink.
Regardless, the voting process has now taken place and the will of both Tesla and SolarCity shareholders is now clear. Interestingly enough, Musk recently unveiled SolarCity’s crown jewel, the shingle-size solar panels — which may just have turned some Tesla votes in favor of the merger.
Announcing the tiles that resembled the shingles you would find on a normal roof, Musk had said,
The basic proposition will be: Would you like a roof that looks better than a normal roof, lasts twice as long, costs less and, by the way, generates electricity? That’s looking really promising, and I think there’s even room for improvement beyond there.
Well, the concept is certainly intriguing and it is easy to see how it could have helped folks teetering on the edge take a plunge in the merger’s favor.
Interestingly, these shingle sized panels also re-elucidate Tesla’s own strategy for selling cars. Tesla succeed where others had failed because its electric vehicles are high end and do not compromise on either speed or style. SolarCity seems to be taking a similar path with its innovative new shingle sized panels that as Musk says “looks better than a normal roof“.
Musk has also said that SolarCity will not harm the combined entity’s financial interests. He believes that once SolarCity starts selling off all of its products — as opposed to its current practice of owning and then leasing them to homeowners — it will start generating greater profits. Meanwhile, considering that Musk has already said that Tesla will not be raising any funds this year, it is likely that the combined entity that comes out of the merger will move to raise capital next year.
The merger is expected to complete in the near future.