Back to top
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
The Goodyear Tire & Rubber Company (GT) - free report >>
We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
The Goodyear Tire & Rubber Company (GT) - free report >>
Image: Bigstock
Tesla (TSLA) Clears Antitrust Hurdle for SolarCity Purchase
Tesla Motors, Inc. (TSLA - Free Report) has secured antitrust approval from the Federal Trade Commission (FTC) for its deal to acquire SolarCity Corporation . In fact, the deal has obtained early termination, which means that the waiting period for the acquisition will conclude before the statutory period expires, per the FTC.
The FTC website also reveals that early termination implies that the FTC and the Department of Justice Antitrust Division have completed their evaluation of the deal and decided not to pursue any enforcement action during the waiting period.
The approval takes Tesla one step closer to the purchase of SolarCity. However, the automaker still needs to obtain shareholders’ approval for the deal.
Tesla had announced the agreement to acquire SolarCity for $2.6 billion in an all-stock purchase on Aug 1. Per the deal, SolarCity stockholders will receive 0.11 Tesla shares for each stock of SolarCity. When considering the weighted average price for Tesla stock over the week before the announcement, the deal ends up valuing each SolarCity share at $25.37. The figure represents a discount compared to Tesla’s previous offer to buy SolarCity for $26.50–$28.50 per share.
Tesla expects to close the deal in the fourth quarter of 2016. The acquisition is anticipated to generate savings of $150 million in the first year for the combined company.
However, the deal has met with skepticism from investors. Tesla is already struggling to cut its losses. The problem may be further aggravated with the addition of SolarCity’s losses. Moreover, the addition of the latter’s debts and cash outflows will increase the strain on Tesla’s financials.
TESLA MOTORS Price
TESLA MOTORS Price | TESLA MOTORS Quote
Zacks Rank
Currently, both Tesla and SolarCity carry a Zacks Rank #3 (Hold). Some better-ranked automobile stocks include The Goodyear Tire & Rubber Company (GT - Free Report) and Fox Factory Holding Corp (FOXF - Free Report) , each carrying a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>