Company News: SolarCity (SCTY) and Tesla Motors (TSLA) have reached a definitive agreement to merge

The SolarCity (SCTY) confirmed the achievement of a definitive merger agreement with Tesla Motors (TSLA). According to the agreement, the shares of SolarCity will be purchased at weighted average price for the five-day trading period ending on July 29 that $ 25.37 / share. The total amount of the transaction is $ 2.6 billion. SolarCity shareholders will receive 0.110 common shares of Tesla per share SolarCity. The companies expect the deal to be completed in the fourth quarter of 2016.

As noted by the company, the merger will create "the world's only vertically integrated energy company that is stable." The companies expect that the synergies from the merger will be $ 150 million in the first year. In addition, they claim, by the merger of customers the opportunity to save by reducing hardware costs, reduce installation costs, increase production efficiency and reduce the cost of customer acquisition. In addition, the company expects that will benefit from the possibility to use 190 Tesla stores and its international presence.

Tesla shares rose to $ 235.34 (+ 0.23%), SCTY shares fell to $ 24.95 (-6.55%).