[jacquesm]

It could, but in practice that rarely - if ever - actually happens. Usually the synergies translate into fewer people working longer hours and wasting of money elsewhere in the now doubled org.

For Tesla and Solar City the overhead could come from simply not operating similar enough companies to allow much in terms of integration. In the longer term it could even cost money.

Such talk is usually just a way to butter up investors ahead of a deal, it's just part of the sales process.

[tcoppi]

Since both Solar City and Tesla are burning cash right now, I highly suspect Solar City is going to face a massive layoff of their sales staff and massive cut to marketing, which is where a majority of their costs are right now. With that gone, Solar City might be profitable, or at least close to break-even, based on existing solar installs.

That's what Tesla is probably hoping for anyway, I highly doubt it will work out quite that nicely. This seems like a highly risky acquisition from a financial perspective for both companies.