The enterprise value of the deal is about $3.2 billion including debt.
Vivint Solar shareholders will receive 0.55 a share of Sunrun for each share held, which represents a premium of more than 10% to Vivint Solar's closing price Monday of $10.63.
Sunrun shareholders will own about 64% of the combined company after the merger is completed in the fourth quarter. Vivint Solar shareholders will own the remaining 36%.
“Americans want clean and resilient energy. 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,” said Lynn Jurich, Sunrun’s CEO and co-founder, in a statement. "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.”
The companies said their combined customer base of nearly 500,000 "creates a leading owner of solar assets globally, with over 3 gigawatts of solar assets on the balance sheet."
"Yet," the companies added, "residential solar has reached only 3% penetration in the United States today and the runway for growth remains massive."
Sunrun shares rose 11.57% to $23.81 in trading Tuesday, while Vivint Solar shares were up 23.52% to $13.13.