Tesla’s board of directors has just sent an offer to acquire SolarCity to the company’s CEO. In other words, the electric car company Elon Musk is the CEO of just offered to buy the solar company Elon Musk is the chairman of (and his cousins happen to be the co-founders of).

In the letter, sent to SolarCity co-founder and CEO Lyndon Rive, Tesla’s board of directors offered to buy all of SolarCity’s remaining common stock in exchange for Tesla’s common shares. That’s $26.50 to $28.50 a share, according to the board.

The stock-for-stock deal amounts to about $2.8 billion based on where Tesla stock was trading before the proposal was announced.

As of yesterday, Musk personally owns 22,160,370 shares of SolarCity. So if the respective boards of each company approves the acquisition, Musk would personally reap $587,249,805 to $631,570,545.

Tesla’s move to acquire the solar company will help Musk in his goal of accelerating the world’s transition to using completely sustainable energy to fuel transportation. Bringing together the two companies would enable Tesla to work closely with the solar company on its energy products like the Powerwall and Powerpack which are used to power homes and businesses in addition to powering its EVs.

"This is something we’ve been thinking about and debated for many years," Elon Musk said during a press call. "Just from a product integration standpoint and offering the most compelling experience to consumers and businesses we really need to achieve a tighter integration of the products."

"It’s the right timing because Tesla is wrapping up its activities with battery storage and Solar City is getting ready to release some exciting products as well," he continued.

If the acquisition goes through, the products will all fall under the Tesla brand. The big difference, Musk said, is cost of sales and implementation would drop because the SolarCity and Tesla products will be integrated.

"The decision to bring two companies together [will be] a result of shareholder votes independent of me," he said. "This will only move forward if there’s a majority vote of the non-me shareholders. This is simply what we think makes sense but ultimately it will have to be decided by the shareholders."

"I personally think this is a no-brainer," Musk said. "But it will become apparent over time."

So it’s up to the shareholders. The offer, should they accept it, was penned by Tesla’s board of directors which, aside from Musk, includes Brad Buss — who was formerly the CFO of Solar City until he resigned in November 2015 — Robyn Denholm, Ira Ehrenpreis, and DFJ ventures partner Steve Jurvetson.

"I think most of our customers have an interest in solar, I’d be shocked if they don’t," Musk said. "Tesla’s customer base will expand dramatically with the Model 3, [so] I think there are going to be a pretty huge number of customers where we can provide them the complete solution from energy generation, to storage, to transportation."

Here’s the offer letter:

Dear Lyndon: We are pleased to submit to you and the SolarCity board of directors a proposal to acquire all of the outstanding shares of common stock of SolarCity in exchange for Tesla common shares. Subject to completing due diligence, we propose an exchange ratio of 0.122x to 0.131x shares of Tesla common stock for each share of SolarCity common stock. This proposal represents a value of $26.50 to $28.50 per share, or a premium of approximately 21% to 30% over the closing price of SolarCity’s shares, based on today’s closing price of SolarCity’s shares and the 5-day volume weighted average price of Tesla shares. We believe that our proposal offers fair and compelling value for SolarCity and its stockholders, while also giving SolarCity’s stockholders the opportunity to receive Tesla common stock at a premium exchange ratio and the opportunity to participate in the success of the combined company through their ongoing ownership of Tesla stock. The board of directors of Tesla is excited at the prospect of a potential combination of SolarCity’s business with Tesla. We believe that the possibilities for product, service and operational synergies would be substantial, and that a combination would allow our companies to build on our respective core competencies and remain at the forefront of delivering innovative approaches for sustainable transportation and energy. We believe that a combination would generate significant benefits for stockholders, customers and employees of both Tesla and SolarCity. We are committed to a possible transaction that is fair to SolarCity’s and Tesla’s respective stockholders. To help ensure that, Tesla is prepared to make the consummation of a combination of our companies subject to the approval of a majority of disinterested stockholders of both SolarCity and Tesla voting on the transaction. In addition, as a result of their overlapping directorships, Elon Musk and Antonio Gracias have recused themselves from voting on this proposal at the Tesla board meeting at which it was approved, and will recuse themselves from voting on this proposal at the SolarCity board as well. We believe that any transaction should be the result of full and fair deliberation and negotiation by both of our boards and the fully-informed consideration of our respective stockholders. Our proposal is subject to the satisfactory completion of due diligence, the negotiation of mutually agreeable definitive transaction documents, and final approval by the Tesla board. While a transaction would be further subject to customary and usual closing conditions, we believe that Tesla is well positioned to negotiate and complete the transaction in an expedited manner. We do not anticipate significant regulatory or other obstacles in consummating a mutually beneficial transaction promptly. In light of Elon Musk’s SEC disclosure obligations in his individual capacity as a stockholder of SolarCity this proposal will be publicly disclosed, but Tesla’s intention is to proceed only on a friendly basis.We look forward to discussing a potential transaction with you, and hope to expeditiously enter into a definitive agreement. Sincerely, The Board of Directors of

Tesla Motors, Inc.

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