Motion Digest Network

Tesla Motors Inc. on Monday said it had reached a deal to buy SolarCity Corp. The all-stock deal values SolarCity at about $2.6 billion, with SolarCity stockholders receiving 0.11 share of Tesla for each share of SolarCity, valuing them at $25.83 apiece, according to Friday’s closing prices.

If it is approved by shareholders, the deal would double Tesla’s workforce to nearly 30,000 employees and create a unique combination of solar, power storage and transportation, which Tesla says would be the world’s only integrated sustainable energy company.

Mr. Musk, who owns more than 20% of both companies and is the largest shareholder in both, plans to vote his shares in proportion to the voting by the companies’ publicly held shares.

“It’s really all part of solving the sustainable energy problem,” Mr. Musk said during a conference call with analysts to discuss the deal. “That’s why we are all doing this, to accelerate the advent of a sustainable energy world.”

Some in the solar industry, meanwhile, view the deal as a bargain for Mr. Musk, noting that SolarCity’s stock is down more than 50% from the start of the year.

SolarCity is the largest player in the U.S. residential solar market, with a nearly 32% share of the market as of the first quarter of this year, according to GTM Research.

A joint company would recognize $150 million or more in cost savings in the first full year after closing the transaction, he said.

The solar company’s cost to acquire new customers rose 80% in the first quarter from the previous quarter, and is more than 30% of the overall cost of installing a home solar panel system.

For Tesla, SolarCity brings teams of installers across more than a dozen states, which will be able to install electric-car chargers, separately or together with panels and batteries, the companies said.

If SolarCity does accept a better deal during the 45 days, the company would pay Tesla a $26.1 million breakup fee.