Elon Musk said on Tuesday that a SpaceX-Tesla merger would be a good idea, but that any decision is "really up to the special committees of both companies." According to DW, Musk made the remarks on an investor conference call. Nothing has been agreed.
Musk said he cannot take part in the special committee discussions because he is a conflicted party, according to DW. The committees are made up of independent directors. According to Rappler, Musk said the committees were formed at the request of shareholders, who would ultimately need to approve any deal.
Musk also said the committees had not agreed on transaction terms and may never do so. He called it premature to assume a merger would happen, according to Rappler. BBC World reports that Tesla is valued at roughly $1.5 trillion and SpaceX at $2 trillion, which would make a combination the largest merger ever.
SpaceX shares rose 8% in extended trading after the comments, and Tesla shares rose 1.8%, according to Rappler. BBC World reports Tesla’s rise as about 2%. The day of the comments is reported as Tuesday, October 20, by BBC World and Rappler. DW gives the day as Thursday, which appears to be an error in that article.
SpaceX recently reported its first profit as a public company, with net income of $4.4 billion and revenue up 161% to $14.58 billion for the three months ended September 30, according to Rappler.
A person familiar with the matter told Reuters, as cited by Rappler, that talks started in recent weeks and could result in SpaceX acquiring Tesla. The same person said Tesla has an investment bank advising on the discussions. The source is anonymous and was not authorized to speak to media, so the report is unconfirmed.
Barclays suggested last week that a deal could be announced before Tesla’s annual meeting in December, according to Rappler and DW. That is a single analyst view.
Neither SpaceX nor Tesla has confirmed transaction terms, a deal structure or a timeline, and the sources cite no company filing beyond Musk’s remarks. The sources also give no figure for how Tesla shareholders would be valued in a deal. They cite a 50% shareholder approval threshold for any transaction.
The special committees of both companies will assess a potential deal, which would need shareholder approval.
Sources
This article was written with AI assistance from the published reporting listed above. It is part of the World Brief daily news podcast.