Tesla to buy SolarCity for $2.6bn

Tesla Motors Inc said on Monday it had reached a deal with SolarCity Corp to buy the solar panel installer for $2.6 billion.

The deal is a big step in chairman and a major shareholder of the Tesla Motors Elon Musk's plan to offer consumers a one-stop clean-energy shop.

Musk is the largest shareholder in both companies and is chairman of SolarCity. His cousins Lyndon Rive and Peter Rive are co-founders of SolarCity.

The combined entity would sell solar panels, home battery storage systems and electric cars under a single brand.

"Solar and storage are at their best when they're combined," the companies said in a blog post on Tesla's website.

Last month, Musk unveiled his "Master Plan" plan which laid out a vision of an integrated carbon-free energy enterprise, offering electric vehicles, car sharing and solar energy systems.

It also includes a "go-shop" provision that allows SolarCity to solicit offers from other potential buyers for 45 days through September 14.

Up to Friday, SolarCity's stock had risen about 26 percent since Tesla first made an offer on June 21.

SolarCity stockholders would receive 0.110 Tesla common shares for every share held, the companies said on Monday.

The offer values SolarCity at $25.37 per share, based on the five-day volume-weighted average price of Tesla shares as of Friday.

SolarCity had formed a special committee to review Tesla's initial offer, which was pitched at 0.122 to 0.131 Tesla shares for each SolarCity share.

SolarCity's shares were down 5 percent at $25.36 in premarket trading on Monday.

Tesla shares were little changed at $234.95.

Tesla and SolarCity said they expect to save $150 million in costs in the first full year if the deal approved by a majority of the disinterested shareholders of Tesla and SolarCity.

The companies said the deal would also save customers money by lowering hardware costs and reducing installation costs.

Up to Friday's close, Tesla shares had risen 7 percent since the company first announced the offer.