Residential solar electricity provider Sunrun has signed a definitive agreement to acquire US-based Vivint Solar for an enterprise value of $3.2bn.

Under the deal, Sunrun will acquire full-service residential solar provider Vivint Solar in an all-stock transaction.

Each share of Vivint Solar common stock issued will be exchanged for 0.55 shares of Sunrun common stock. This represents a combined enterprise value of $9.2bn based on the closing price of Sunrun’s shares on 6 July.

If approved, the deal will create a company with about 500,000 customers.

Sunrun co-founder and CEO Lynn Jurich said: “Vivint Solar adds an important and high-quality sales channel that enables our combined company to reach more households and raise awareness about the benefits of home solar and batteries.

“This transaction will increase our scale and grow our energy services network to help replace centralized, polluting power plants and accelerate the transition to a 100% clean energy future. We admire Vivint Solar and its employees, and look forward to working together as we integrate the two companies.”

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All the support agreements relating to the deal were obtained from both companies’ largest stockholders. These include Blackstone affiliate 313 Acquisition, and Tiger Global, which will use their votes in favour of the merger and the share issuance.

Completion of the deal is subject to approval by the companies’ stockholders, regulatory approvals and other customary closing conditions. The companies expect the deal to finalise in the  fourth quarter of this year.

Vivint Solar CEO David Bywater said: “Vivint Solar and Sunrun have long shared a common goal of bringing clean, affordable, resilient energy to homeowners.

“Joining forces with Sunrun will allow us to reach a broader set of customers and accelerate the pace of clean energy adoption and grid modernisation. We believe this transaction will create value for our customers, our shareholders, and our partners.”