The Delaware Supreme Court affirmed the Court of Chancery’s determination that Tesla’s 2016 acquisition of the solar energy company SolarCity Corporation was “entirely fair.” The Supreme Court found that the trial record supported the Chancery Court’s decision and that the Chancer Court committed no reversible error in its application of the entire fairness test, which requires scrutiny of both fair dealing and fair price. Among other things, the Supreme Court rejected the appellants’ contention that the trial court erred when it relied on the potential synergies of the acquisition as evidence of the fairness of the price. The Supreme Court said “synergistic values are a relevant input for a court to consider in assessing the entire fairness of an acquisition,” including in this case where potential synergies related to the objective of making Tesla an integrated, sustainable energy company were a motivator for the transaction.

Claims against proposed acquisition of SolarCity Corporation by Tesla Motors, Inc.


In re Tesla Motors, Inc. Stockholder Litigation

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Delaware Supreme Court Said Tesla Acquisition of SolarCity Was “Entirely Fair”

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United States of America

Delaware

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An aim to achieve a quantifiable outcome within a given time-frame, set by an institution such as a national government.

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Risk is the potential for adverse consequences resulting from the dynamic interplay between (climate-related) hazards, exposure, and vulnerability of affected human or ecological systems.

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A set of principles, processes, and practices that build economic and political power to shift from an extractive economy to a regenerative economy.

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Renewable energy means all forms of energy produced from renewable sources in a sustainable manner.

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Area of the economy in which actors engage in identical or related activities.

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The management and allocation of funds, assets and investments to meet various objectives

A tax advantage is a fiscal incentive where the government reduces or exempts selected activities, goods or actors from taxes.

A loan is a policy instrument where funds are provided to a borrower with the expectation of repaying the principal plus interest.

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A ban is a legal action that prevents the sale or supply of a product or service, or that recalls a product from the market. Examples are bans on SF6, greenwashing, fossil fuel advertisement or single-use plastics.

Either money or something of monetary value is transferred between two or more organisations, people or countries.

Replacing technologies that burn fossil fuels directly with alternatives powered by electricity.

Actions to reduce emissions in energy generation and supply.

Technologies that capture and hold energy in reserve for later use.

Extreme weather refers to events where a weather variable exceeds (or falls below) a threshold. Meaning it is significantly different from the average or usual weather pattern.

Production of electricity and heat from solar irradiation.

Oil is a combustible liquid fossil fuel composed mainly of hydrocarbons, occurring as crude oil and refined into petroleum products such as petrol, diesel and kerosene.

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Activities of industries that extract natural resources, such as mining, oil, and gas, for commercial use.

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Activities of businesses and institutions that provide financial services and products to individuals and organisations.

Delaware Supreme Court Said Tesla Acquisition of SolarCity Was “Entirely Fair”

Policy instrument

Risk

Renewable energy

Fossil fuel

Economic sector

Finance