Tesla and SpaceX committees weigh merger, with no deal agreed
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Tesla and SpaceX have set up independent director committees to discuss a possible merger, but no terms have been agreed and a deal is not certain. Elon Musk, who leads both companies, says he is excluded from the discussions because of his conflict of interest; he called a merger a good idea but said it is for the committees and shareholders to decide.
Tesla approval would require votes representing at least 50 per cent of all its shares, a high hurdle. The combined company could be valued at more than $3.6 trillion, and analysts and legal experts expect SpaceX would more likely acquire or absorb Tesla. That could give SpaceX shareholders majority control, while Tesla investors could face dilution and the costs of SpaceX’s large spending needs.
- Committees are discussing a merger, with no deal agreed.
- Tesla needs votes representing half of all shares.
- Analysts expect SpaceX would likely absorb Tesla.
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Tesla makes electric cars and runs energy businesses, while SpaceX builds rockets and satellite internet services. Both companies are led by Elon Musk, who also has interests in artificial intelligence, chips and robotics.
The companies have separate shareholders and boards. Because Musk has a role in both, independent directors would need to assess any proposed combination, and Tesla shareholders would need to approve it under the company’s voting rules.
Combining the businesses could link work on technology and satellite connectivity, but it would also bring together companies with different operations and financial needs. SpaceX’s high spending on rockets and other projects could affect the risks and ownership stakes for Tesla shareholders.
More coverage
- BBC Science — Elon Musk says Tesla-SpaceX merger would be a 'good idea'
- TechCrunch — SpaceX and Tesla boards form special committees to review merger
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Originally published by The Verge as “Tesla and SpaceX are discussing a possible merger, Musk says”.