Today the U.S. Federal Trade Commission (FTC) granted anti-trust approval for Tesla to acquire SolarCity, as a key authorization in the process. Anti-trust permission is typically given when two companies do not have competing product lines.
This is not the last approval that Tesla needs. Additionally, the Securities and Exchange Commission (SEC) must approve the company’s S-4 filing, which will trigger shareholder votes of both parties.
While a number of mainstream media outlets reported that Tesla had bought SolarCity when the deal was announced, SEC approval and votes of shareholders of both companies are still required before the acquisition can go through. Elon Musk and SolarCity Founders Lyndon and Peter Rive have recused themselves from shareholder votes, as have other top executives.
“We hope the transaction will be complete later this year,” SolarCity Director of Communications Kady Cooper told pv magazine.
This approval comes amid a number of troubling signals at SolarCity, which missed its guidance and reported heavy losses in its Q2 results. Since that time the company has planned to lay off 108 staff, including 80 at its headquarters in Menlo Park, and issued a high-interest bond offering which was mostly bought up by Elon Musk and the Rive brothers.
Following the first reports of FTC approval this morning the stock prices of Tesla and SolarCity have shown minor fluctuations, but no significant changes.