TSLA Tesla Inc

Tesla Motors Inc. on Monday said it had reached a deal to buy SolarCity Corp., combining Elon Musk's electric-car and solar-energy companies.

The all-stock deal values SolarCity at about $2.6 billion. SolarCity stockholders will receive 0.11 shares of Tesla for each SolarCity share, valuing them at $25.83 apiece, according to Friday's closing prices.

Late in June, Mr. Musk proposed pairing the companies that he backs, the latest in a series of financial shuffles among disparate firms of his empire.

Tesla had said the deal was subject to approval of "a majority of disinterested stockholders" of both companies, and in a filing Monday said a special committee of "independent and disinterested" SolarCity board members evaluated the proposal.

Mr. Musk, who has borrowed money and shuffled funds among his companies, recused himself from voting on the deal at the Tesla board meeting at which it was approved and would do so for any vote on the SolarCity board as well, the initial offer letter said.

SolarCity shares shot up 7.4% premarket to $28.68, while Tesla shares edged 0.1% lower to $234.50.

Write to Anne Steele at Anne.Steele@wsj.com

(END) Dow Jones Newswires

August 01, 2016 07:55 ET (11:55 GMT)

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