Tesla and Solar City announce intention to merge

Tesla and Solar City announced their decision to merge in an all-cash deal worth approximately $2.6bn.

The deal had been part of Tesla CEO Elon Musk's strategy, as he is also the chairman of SolarCity, as well as being the biggest shareholder in both companies.

The agreement to merge the two firms was not certain, as SolarCity had set up an independent review committee to analyse the decision, which was not influenced by Musk.

There was initial apprehension from Tesla shareholders about the proposal, but they have gradually warmed to the idea after a lowering of the price.

A combination of Tesla's clean energy cars and the solar panel technology of SolarCity will allow Musk to press ahead with the development of his self-driving cars and other technological advances.

The exact terms of the deal have not been released. Tesla had previously said it offered 0.122 to 0.131 of its shares for each SolarCity share.

The automaker has come under pressure in recent months following an investigation into their new autopilot system, after a driver was fatally injured during a crash in which the self-drivin technology is said to have played a part.

In a blog post released by SolarCity, the company said that it was the pristine time to bring the two entities together.

"Now is the right time to bring our two companies together: Tesla is getting ready to scale our Powerwall and Powerpack stationary storage products and SolarCity is getting ready to offer next-generation differentiated solar solutions."

"By joining forces, we can operate more efficiently and fully integrate our products, while providing customers with an aesthetically beautiful and simple one-stop solar + storage experience: one installation, one service contract, one phone app."