Elon Musk has built an ambitious business empire on three pillars: electric cars, solar energy and space travel.
Now, the billionaire entrepreneur is trying to shore up his embattled solar panel provider by merging it with the electric carmaker.
His Tesla Motors said on Tuesday that it had offered to buy SolarCity in an all-stock deal, one that could value the latter at as much as $2.8 billion. The aim, Mr. Musk argues, is to create a renewable-energy giant, collecting clean electricity and putting it to work propelling cars.
But the transaction highlights the unusual moves that Mr. Musk continues to make to support the various arms of his empire, where he is the largest shareholder of each company.
He has taken out loans to buy up shares in Tesla and SolarCity, some backed by his personal stock holdings in both companies — a risky move that leaves him exposed to margin calls if their stock prices slide too far. He has defended the practice as low-risk to other shareholders, given the sheer size of his personal net worth of more than $10 billion.
In Mr. Musk’s view, putting Tesla and SolarCity together is only logical.
“We need to achieve a tight integration of the products,” he told reporters in a conference call on Tuesday. “I think it’s an obvious thing to do.”
An agreement is some time away, if one is ever reached. But shareholders in SolarCity pushed the company’s stock up 19 percent in after-hours trading, to $25.26. Shares of Tesla, however, tumbled more than 13 percent, to $190.59.
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