Tesla and Gm Proposed Merger

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FINC 664W
University of Redlands
Capstone Paper
General Motors and Tesla Merger
Juan Carrillo, Shane Cheek, Jeffrey Haynes, and Peter Delacruz February 23, 2013

Dear Fellow Shareholders:

A meeting of Shareholders is scheduled for Saturday, February 23, 2013. Enclosed is a copy of our proxy statement. At this meeting of shareholders, the Board of Directors will be seeking approval to acquire Tesla Motors. The Board of Directors believes that this merger will provide General Motors revenue, growth, and competitive edge to our existing product mix. Additional information concerning this matter is presented in the body of the proxy statement. We encourage you to review this information. Please take a moment and sign, date, and return the enclosed form of proxy. This way your shares will be represented whether or not you are able to attend the meeting. We would like to thank you for your attention to this matter and for your continued support.

Respectfully,

Chief Executive Officer

General Motors and Tesla Merger
The General Motors-Tesla acquisition is a great opportunity to combine similar and innovative companies in the auto industry. The following report will help elucidate why we are confident that this acquisition must take place. We will provide you with detailed information in regards to our reasons and considerations why this merger must take place and how it benefits General Motors, Tesla Motors each company’s shareholders and consumers. General Motors (G.M.) acquisition of Tesla will take this company forward and position us with leading edge technology in the industry, possibly taking over Toyota at the top. G.M. can utilize Tesla’s innovation and technologies to continue to move forward with our vision to design, build, and sell the world’s best cars. Conversely, Tesla’s can utilize GM’s manufacturing facilities and distribution channels to exercise economies of scale and achieve their goals of making electric cars available to all social classes. In addition, Tesla can use GM to help them with their finances cutting their debt to the U.S. government. Moreover, with the synergies between these two companies, the cost of electric vehicles will be affordable. The cost of electric vehicles today makes them available only for the well-to-do but with this merger, the vision of Tesla to distribute electric affordable cars worldwide will come to fruition. Furthermore, considerations and reasons for this merger will also be discussed. In this report we will present an overview of both companies, strategies, SWOT and STEEP analysis, product development, justification for the merger, nature of the offer, integration plan, financials, risk and, reasons why merger should be approved by G.M. and TSLA shareholders and board of directors.

GM's Strategy:
Vision: To design, build and sell the world’s best vehicles (Akerson, 2010). Mission: "G.M. is a multinational corporation engaged in socially responsible operations, worldwide. It is dedicated to provide products and services of such quality that our customers will receive superior value while our employees and business partners will share in our success and our stockholders will receive a sustained superior return on their investment" (Buchen, 2011). Where G.M. started. Forward Thinking:

GM was started by a horse carriage salesman named William Crapo "Billy" Durant in 1908.  Prior to that Billy started his own carriage manufacturing company in 1886 and managed to turn $2,000 into $2 million.  Around the 1900’s small independent makers were producing gasoline-powered carriages in garages.  These carriages were not popular as there were very few in use.  Instead of fighting the new technology Durant embraced change, thought forward, and bought a small gas-powered carriage manufacturing company called Buick.  At the time there had only been 37 Buicks ever sold.  Shortly after buying Buick Durant made improvements to the...
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