The Federal Trade Commission (FTC) has cleared Tesla to buy SolarCity, the solar energy provider that Tesla CEO Elon Musk helped found. The government’s blessing paves the way for the merger plan Tesla announced at the beginning of the month, a deal said to be worth $2.6 billion.
In order for the deal to be approved, the FTC had to make sure there were no antitrust concerns. The government agency signed off on it “because the merging companies have few or no overlaps,” Reuters reports. SolarCity agreed to the deal following increased pressure from competition, which has contributed to hundreds of layoffs. In addition, many states have cut subsidies for rooftop solar systems, which raises costs.
In Tesla’s Master Plan, Part Deux, Musk outlined his strategy for the merger, which would create a one-stop shop for renewable energy. Musk said he wanted to offer a “smoothly integrated and beautiful solar-roof-with-battery product that just works,” and to do that the services need to be combined so there’s just one installation, one customer service line, and one app. Tesla offers its Powerwall home battery pack through the Tesla Energy side of the business.
Now that the deal has FTC approval, all that’s needed is for Tesla to formally submit the merger paperwork to the Securities and Exchange Commission. After that, a date will be set for shareholders to vote on the deal.
source: motortrend.com by ALEX NISHIMOTO