Tesla bids Rs. 23,500 crore to acquire SolarCity

Tesla Motors has made an offer worth Rs. 23,500 crore to buy SolarCity, an American company that deals in solar power systems for houses and industries. Tesla, in an official statement, has suggested that SolarCity's technology can be used to supply energy to its fleet of electric cars.

Interestingly, Elon Musk, who is the founder and CEO of Tesla Motors, was a co-founder of SolarCity, which is now under the reigns of his cousin. Musk is also the largest shareholder of both companies, and is currently designated as the Chairman of the SolarCity board. Moreover, Tesla supplies battery packs for the solar systems employed by SolarCity. Keeping in mind this close relation between the two companies, market experts suggest that a deal will be signed soon.

The proposal from Tesla involves a stock-swap deal under which, Tesla will exchange all outstanding shares of the common stock of SolarCity, by Tesla common shares. As a result, Tesla is offering a 21 to 30 percent hike on each share of SolarCity. In monetary terms, this deal is being valued at £2.4 billion, which translates to around Rs. 23,623 crore.

If the above deal does see the light in the near future, it will make Tesla the only vertically integrated energy company in the world to offer end-to-end solar power solutions. These would include solar systems at your home or office, electric cars, and a solar system to supply power to charge the electric car.

SolarCity is currently under a debt of $3 billion, while the most recent earning reports claim that the company isn't profitable either. But SolarCity officials claim that they would start making profits from the end of this year.