Tesla, SolarCity tout $150 million in cost synergies within first year
Tesla Motors Inc. and SolarCity Corp. held a call with analysts early Monday morning to defend a proposed deal between the two companies and tout the cost synergies that would occur if the two combined. Earlier on Monday, Tesla announced an offer to buy SolarCity for roughly $2.6 billion. The deal, subject to SEC review and majority approval from the independent shareholders of both companies, is expected to close in in the fourth quarter. On the call, the companies said they expect to achieve $150 million in cost synergies within the first year. Within three to five years, they expect every single system across the two portfolios to include both solar and storage. Elon Musk, who serves as chairman of both companies, said synergies will include the streamlining of production on the backside, the improvement of customer acquisition costs, and the ability to educate consumers about the benefits of combining solar production and storage. Shares of Tesla rose 0.2% to $235.31 in premarket trade, while those of SolarCity plunged 6.2% to $25.05. As of Friday's close, SolarCity's shares had declined by 12% in the past 12 months and 54% in the past year. The S&P 500 , meanwhile, is up 5.2% in three months and 3.3% in the past 12.
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