(Reuters) - Sunrun Inc (O:RUN) said on Monday it will buy Blackstone-backed peer Vivint Solar (N:VSLR) for about $1.46 billion in an all-stock deal, as the top U.S. residential solar installers look to solidify their market position.
The deal will also help Sunrun compete better with Tesla Inc's (O:TSLA) SolarCity in a residential solar market, which, according to the companies, has reached only 3% penetration in the United States.
Vivint Solar shareholders will receive 0.55 of Sunrun common stock for each share held, representing a premium of 10.4% to Vivint's Monday close.
The deal, unanimously approved by the companies' boards, is valued at $3.2 billion including debt.
Blackstone Group Inc (N:BX) owns a 55.84% stake in Vivint Solar, according to Refinitiv Eikon data.
The private equity company bought Vivint Solar's parent, Vivint Inc, in 2012 for more than $2 billion. Vivint Solar went public in 2014.
The deal is expected to close by the fourth quarter of 2020 and deliver annual cost savings of about $90 million, the companies said.
Credit Suisse (SIX:CSGN) Securities was the financial adviser to Sunrun, while Morgan Stanley (NYSE:MS) and BofA Securities advised Vivint.
Vivint Solar in May reported an adjusted loss of $1.01 per share in its first-quarter results while withdrawing its full-year forecast. Sunrun posted a net loss of 23 cents per share for the same period.
Business Insider reported in April that Sunrun had laid off at least 100 workers and furloughed another 60 due to the impact of the coronavirus outbreak.