Independent board members have approved Tesla's bid to acquire SolarCity in an all-stock transition worth $2.6 billion.

By combining the two companies, Tesla expects to realize cost efficiencies of $150 million in the first year after closing the deal. Those savings will mostly be driven by sales and marketing efficiencies, overhead savings and manufacturing efficiencies. That will likely mean layoffs, particularly in sales. Tesla said that $150 million was probably a conservative figure.

As for the factories, “I think we’ll have more people, not fewer people,” said Tesla CEO Elon Musk, speaking on an investor call this morning. He said the Gigafactory workforce could double to near 10,000 people while it triples output.

The agreement came on the same day that SolarCity “preannounced” its Q2 operating metrics for 2016 and lowered its annual guidance for the second time this year.

The leader in residentialsolarPV installations announced it exceeded its Q2 numbers by 16 megawatts, installing 201 megawatts and beating guidance of 185 megawatts. But overall year-end guidance has been reduced to 900 to 1,000 megawatts from an original guidance of 1,250 megawatts. In 2015, the company also revised its annual guidance downward twice.

“A range of sales process improvements and the introduction of a new loan offering began to help improve bookings in the second quarter, but residential bookings in the first half of the year were still lower than we anticipated overall,” SolarCity said in a statement.

SolarCity's downward revision of installation numbers offers more fodder for skeptics of Tesla's acquisition plan.

When asked on a call Monday morning about the timing of this acquisition -- given that solar-plus-storage may not be financially attractive in most of the U.S. for a few years at least -- Tesla CTO JB Straubel explained that Tesla’s adoption outlook is more aggressive if consumers are offered a well-integrated product.

But the timing continues to raise questions. Is this a distraction for Tesla? Is it a bailout for SolarCity? 

Musk says its the next logical step in his master plan. “The whole point of the merger is to get rid of the conflicts of interest,” said Musk, suggesting that a single company is essential to moving his vision forward.

Many investors and analysts have questioned what value SolarCity brings to Tesla, especially in the near term. But for some investors, increased diversification and lowered costs for an integrated company offer value in the long term.

“Despite much near-term focus on SCTY, autopilot, deliveries and demand, we find conversations with investors more focused on longer-term earnings potential,” wrote Baird Equity Research in a briefing.

Tesla wants to reinvent the power sector without completely risking the financial future of utilities. Currently, some vertically integrated utilities see distributed solar providers such as SolarCity as threats to their revenue. But Musk wants to work with them to realize his vision.

“There’s a prosperous future for both utilities and solar rooftop providers,” Musk said. 

SolarCity shareholders will receive 0.110 Tesla common shares per SolarCity share, valuing SolarCity common stock at $25.37 per share.

The deal still requires approval from a majority of disinterested shareholders by both SolarCity and Tesla, as well as regulatory approval. If approved, it is expected to close in the fourth quarter of 2016.

Listen to our recent conversation on the Energy Gang podcast about Musk's master plan. Where will solar fit in?