Tesla Motors and SolarCity are expected to announce merger plans on Monday, Reuters reports.
The companies would then have to convince their respective shareholders to approve the deal.
Tesla CEO Elon Musk, who also serves as SolarCitys chairman, is pushing for the merger with solar leasing group, which is run by his cousin, CEO Lyndon Rive.
Musk, the biggest shareholder of both companies, argues that a merger would be a win for both companies, facilitating SolarCitys access to the electric carmakers customers, which could install PV systems on their homes to charge their cars and power Tesla storage batteries. Teslas $5 billion battery gigafactory in Nevada is key to both Tesla and SolarCitys businesses.
Reuters points out that the merger agreement is not certain since SolarCity had established a special committee to review Tesla’s offer independent of Musks influence. In addition, the deal will likely include a provision allowing SolarCity to consider offers from other interested buyers.
Musk, Rive and his brother, SolarCity board member Peter Rive, and several other executives have recused themselves from voting, Reuters adds.
Tesla has said it offered 0.122 to 0.131 of its shares for each SolarCity share. Tesla and SolarCity have market capitalizations of $34.6 billion and $2.6 billion, respectively.
While Tesla shares initially dropped to below $190 following its June 21 offer, they have recovered, closing at $234.79 on Friday, signalling increasing support from shareholders for the deal.