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WILMINGTON, Del. — Elon Musk said Tesla bought SolarCity Corp. for one fundamental reason: to become more than a car company.
The Tesla Inc.
TSLA,
chief executive made the argument as he wrapped up two days of sometimes feisty testimony in court, defending the roughly $2.1 billion tie-up completed in 2016 at a time both Tesla and SolarCity were financially struggling.
Vice Chancellor Joseph Slights III, the presiding judge in a shareholder lawsuit, drilled into that deal logic at the end of Musk’s testimony. “Tesla was facing headwinds, had its own issues,” the judge said. “And so why is it at this moment that Tesla is pursuing this acquisition of a solar company?”
“The goal is not to be a car company. There are plenty of car companies,” Musk responded. “But an electric car company is part of a sustainable energy future, as is solar and stationary storage.”
A group of shareholders is alleging that Musk controlled the takeover while having a financial interest in both companies, that many of its directors were conflicted and that Tesla overpaid for SolarCity. Musk has said he didn’t dictate the deal process or price and recused himself from the shareholder vote.
Musk on Tuesday again dueled with the plaintiffs’ lawyer, Randall Baron, objecting to the attorney’s suggestions that he “co-opted” Tesla’s executives to work on the deal outside of his board of directors’ oversight. Musk later said the lawyer “shot himself in the foot” as the two men argued over Solar City’s share price at the time of the deal.
An expanded version of this article appears on WSJ.com.
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