Tesla and SolarCity agree to $2.6 billion merger

Elon Musk is accelerating his plans to reinvent Tesla, making good on Monday his promise to combine Tesla and SolarCity, two companies where he currently serves as Chairman of the Board.

SEE ALSO: How Elon Musk plans to make Tesla Motors a clean energy powerhouse

Electric car manufacturer Tesla announced its intention to buy SolarCity for $2.6 billion in stock in a blog post a little more than a month after it initially proposed the transaction.

Combining these two companies is actually part of Musk's larger grand plan for Tesla, which includes creating a broad portfolio of Tesla vehicles that range from low-volume/high-cost to low-cost/high-volume and building a company that can handle both the generation and storage of energy.

Bringing Tesla and SolarCity together will, at least at the outset, allow Musk, who founded Tesla and also serves as its CEO, to combine his two clean energy initiatives: The Tesla Powerwall, a wall-mounted home battery, and the solar panel building and installation business that is SolarCity.

Musk explained his reasoning last month in his Master Plan Part Deux:

The deal was approved by the company boards and is expected to save, according to Tesla, the combined company $150M in "cost synergies." It should also lead to one-stop shopping for Tesla's energy products and a single smartphone app to control and monitor their products.

Before anyone pops a cork on this deal, though, Tesla and SolarCity still need regulatory approval and SolarCity is open to shop for a better deal for the next 45 days. Considering that Musk is the chairman of both companies and his cousins run SolarCity, it seems unlikely that the solar energy company will land with anyone else.