Electric car producer Tesla has reached an agreement to move forward on a controversial 2.6-billion-dollar takeover of the clean power firm SolarCity, the Palo Alto, California-based company announced Monday.
Tesla, which announced its interest in SolarCity last month, will fund the transaction with its own stock.
The fusion of the two companies will be complete in the fourth quarter and will save 150 million dollars in the first year, according to Tesla.
Tesla's move is considered controversial in finance circles. Critics such as large-scale investor Jim Chanos say the transaction poses a conflict of interest for Tesla chief Elon Musk, as he is the largest SolarCity stockholder. The company is also run by two of his cousins.
Musk, on the other hand, has called the merger a "no brainer" with advantages that will become clear to both the businesses and the shareholders. Through the merger, SolarCity's facilities will be incorporated into Tesla's energy division.
Starting last year, Tesla has been pursuing the production of batteries for households and businesses while also seeking to bring together the car and energy industries.
On Friday the firm opened up a giant battery factory in Nevada.