Tesla offers to buy solar panel maker SolarCity in deal up to $2.8 bln

(Reuters) - Elon Musk's Tesla Motors Inc said on Tuesday it has made an offer to acquire solar panel maker SolarCity Corp in an all-stock deal worth as much as $2.8 billion (1.9 billion pounds), as the electric car maker looks to expand its clean energy business.

Musk, who is also the chairman and principal shareholder of SolarCity, described the deal as "no brainer" in a call with reporters.

He said the acquisition of SolarCity would transform Tesla into "the world's only vertically integrated energy company offering end-to-end clean energy products to our customers," from solar panels and home storage batteries to electric vehicles.

Tesla shares plunged more than 10 percent to $195.35 in extended trading on Tuesday -- amounting to a loss in value of about $3.7 billion. SolarCity shares rose about 23 percent to $26.13.

Musk, who owns 19 percent of Tesla and 22 percent of SolarCity, said he would recuse himself from voting on the deal.

Tesla said it offered $26.50 to $28.50 per share for SolarCity, which represents a premium of about 25 percent to 35 percent to the company's Tuesday close of $21.19. That values the deal at about $2.6 billion to $2.8 billion overall.

Tesla makes premium electric vehicles that sell for about $70,000 to $150,000, as well as home battery storage units. SolarCity is the No. 1 residential solar company in the United States.

(Reporting by Subrat Patnaik in Bengaluru, Paul Lienert in Detroit and Nichola Groom in Los Angeles; Editing by Bill Rigby and Sandra Maler)