Elon Musk-founded Tesla Motors has made a bid to acquire SolarCity, a US-based company that designs, finances and installs solar power systems. The all-stock deal is estimated to have a net worth of about $2.8bn (£1.91bn, €2.49bn), which is higher than SolarCity's $2.1bn market capital.

As per the deal, the American electric car maker would acquire SolarCity's outstanding shares in exchange for Tesla common shares for between $26.50 and $28.50 a share. While this represents a 21% to 30% premium over SolarCity's Tuesday (21 June) closing price, it is still much lesser than its 52-week high of $61.72.

Renewable energy is not the only common link between Tesla and SolarCity. According to FactSet, a supplier of market data and economic information, the billionaire is both the chairman and the largest shareholder of both the companies, holding 22% in SolarCity and owning a 21% stake in Tesla. Apart from this, Lyndon and Peter Rive, SolarCity's CEO and chief technology officer, are both cousins of Musk.

Due to owning stakes in both the companies, Musk said he would abstain from voting in both the companies. "This [deal] would only move forward if there is a majority vote of the non-me shareholders in both companies," he added. While shareholders in both companies would vote on the deal to decide if the takeover should materialise, Musk said: "My personal opinion is that obviously this is something that should happen — like it's a no-brainer."

Tesla Motors offers to buy American solar company SolarCity in a $2.8bn deal
While Elon Musk holds 22% in SolarCity, he owns 21% stake in TeslaReuters

The prospect of Musk trying to boost the fortunes of one company by using one of his other companies did not go well with investors who pushed down Tesla's share prices by nearly 13% in after-hours trading. SolarCity shares which have declined by nearly 60% in 2016 gained by about 15% in after-hours trading.

Pointing to the benefits of the deal, Tesla said: "We would be the world's only vertically integrated energy company offering end-to-end clean energy products to our customers. This would start with the car that you drive and the energy that you use to charge it, and would extend to how everything else in your home or business is powered."