Elon Musk’s Tesla Motors Inc. has announced to buy SolarCity Corp. for $2.6 billion, in an all-stock deal that would double Tesla’s workforce to 30,000 people and, Musk hopes, make it possible for the company to bring solar energy to the masses.
Combining the two companies could help Musk sell more Tesla batteries for storing solar energy in home installations which would give him an important advantage in competing with powerful utility companies.
But news of the merger generated some criticism from analysts who suggested that combining the two companies would only amplify their individual losses and could possibly distract from ramping up production at Tesla Motors.
The transaction is expected to complete in the fourth quarter of 2016.
Both companies have been burning through cash, although they have projected achieving positive cash flow later this year. SolarCity Chief Executive Officer Lyndon Rive, who is Musk’s cousin, said.