NEWS

Tesla Motors said Monday that it had reached a deal to acquire SolarCity, putting the companies one step closer to an marriage that has drawn scrutiny from Wall Street but which Tesla and SolarCity board member Elon Musk has vigorously defended.

Tesla (TSLA) said the stock deal is worth $2.6 billion, including the assumption of debt, valuing SolarCity shares at $25.37, or 5% lower than Friday’s close.

SolarCity (SCTY) will get 45 days to seek an alternative suitor in a provision known as a “go-shop” period.

Musk, the CEO and chairman of Tesla and chairman of SolarCity, has argued that the deal would accelerate Tesla’s transition from electric vehicle automaker into a fully integrated, renewable energy products company. With solar-panel installer SolarCity on board, Tesla could integrate solar cells onto the roofs of its vehicles and pair solar panels with its emerging energy storage products.

Tesla said the independent board members of both companies had voted to authorize the deal, meaning Musk did not cast a ballot on the accord.

A majority of each company’s independent shareholders must also vote to approve the acquisition, which Tesla expects to close in the fourth quarter.

Tesla said it expects to shed $150 million in costs in the first full year following the deal’s completion.

“We also expect to save customers money by lowing hardware costs, reducing installation costs, improving our manufacturing efficiency and reducing our customer acquisition costs,” Tesla said in a statement.