The electric car giant, Tesla Motors, announced a bid Tuesday to acquire SolarCity and position the company as a leader across the clean energy sphere.
Under the all-stock deal, Tesla offered SolarCity between $26.50 and $28.50 a share, depending on a volume-weighted five-day average price of Tesla shares.
SolarCity has a market capitalization of $2.1 billion and the Tesla offer amounts to about $2.7 billion.
“We would be the world’s only vertically integrated energy company offering end-to-end clean energy products to our customers,” Tesla said on its website.
“This would start with the car that you drive and the energy that you use to charge it, and would extend to how everything else in your home or business is powered.”
In after-hours trade, SolarCity shares shot up 20.6 percent to $25.56, while Tesla fell 11.2 percent to $195.01.
Tesla is led by Silicon Valley star Elon Musk, who also serves as chairman of SolarCity and is a major shareholder of the solar company. Antonio Gracias is a board member of both companies as well.
Tesla said in a letter to SolarCity chief executive Leonard Rive that both men recused themselves on the Tesla board vote on whether to make a bid and would also sit out SolarCity’s vote on whether to accept an offer.
“We believe that any transaction should be the result of full and fair deliberation and negotiation by both of our boards and the fully-informed consideration of our respective stockholders,” said the letter, which was signed the Tesla board of directors.
“In light of Elon Musk’s SEC disclosure obligations in his individual capacity as a stockholder of SolarCity, this proposal will be publicly disclosed, but Tesla’s intention is to proceed only on a friendly basis.”