In August, SolarCity accepted an acquisition offer from Tesla for $2.6 billion, paving the way for Elon Musk’s master vision of a carbon-free energy and transportation behemoth.
Not everyone was happy about the transaction, however. SolarCity’s debt and cash situation could be a burden on Tesla, investors argue. And then there’s the fact Musk owns more than 20% of each company—not to mention his cousin is the CEO of SolarCity.
But to hear it from advisory firm Institutional Shareholder Services, the deal should go through. A report from the firm argues that Tesla is “is paying a low to no premium to take over SolarCity,” and there are plenty of synergies between the two companies—Musk himself said their technologies go together “like peanut butter and jelly.”
ISS believes that, long-term, it’s a smart merger. Solar isn’t financially strong today, but could be a game-changer in the future—and that, combined with fully autonomous electric vehicles, is one hell of a product suite.