A week past unveiling the second chapter of Elon Musk’s master plan, Tesla has announced that they will be acquiring SolarCity in an all-stock deal worth $2.6 Billion. The procurement will act as a major catalyst in pushing forward sustainable development and for creating “fully integrated residential, commercial and grid-scale products” to widespread solar power distribution and accumulation.

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Tesla will be consequently, scaling their Powerwall (which is essentially a home battery) and Powerpack stationery by integrating next generation solar solutions from SolarCity resources. This will eventually generate products with “one-stop solar + storage experience: one installation, one service contract, one phone app”. As mentioned in the master plan, the acquisition will work towards building a solar roof product with lesser technical dependencies when compared to the already available panaceas. Moreover, this long term roadmap will empower Tesla’s upcoming automobiles entering the terrestrial transport business. Additionally, they’re also targeting cost reductions for customers by lowering hardware and installation charges with overall manufacturing improvements. Lastly, the merging will constitute utilizing Tesla’s global presence and 190-store retail network for extending reach.

Tesla, in a blog post, stated that “this is an all-stock transaction with an equity value of $2.6 billion based on the 5-day volume-weighted average price of Tesla shares as of July 29, 2016. Under the agreement, SolarCity stockholders will receive 0.110 Tesla common shares per SolarCity share, valuing SolarCity common stock at $25.37 per share based on the 5-day volume weighted average price of Tesla shares as of July 29, 2016.

However, the agreement involves a 45 “go-shop” period which fundamentally allows SolarCity to seek alternative proposals during the defined time. The transaction is expected to close in the fourth quarter of 2016 and will require a majority of the disinterested shareholders of both Tesla and SolarCity voting at each shareholder meeting. Musk’s plans as of now, do sound ambitious, however, Tesla is progressing according to the established roadmap with minimal deadline delays. It will be exciting to see how the company approaches different industries with their energy cautious vehicles.

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Shubham is based out of Ahmedabad, India and is studying to be a Computer Engineer, while specializing in mobile applications. He loves covering what's new in the smartphone space and aims to make it his primary profession some day.