Tesla and SpaceX form committees to discuss possible merger

Summarised from 5 outlets · Updated 21 Oct, 00:39 · Archive

Elon Musk says special committees at Tesla and SpaceX are discussing a possible merger of the two companies.

Elon Musk announced on Tuesday that Tesla and SpaceX have formed special committees to explore the possibility of merging the two companies. Speaking during SpaceX's third-quarter earnings call, Musk said the committees were created at the request of shareholders from both organisations.

Musk described his position as a 'conflicted party' and explained that he is excluded from the committees' discussions. 'Because I'm a conflicted party, I can't actually be in the discussions of the special committees,' he said. 'So it's an odd kabuki dance where two groups of people are talking and I can't be in the conversation.'

The special committees consist of independent directors from each company, though Musk did not name them. According to TechCrunch, Tesla's committee may draw from its seven independent board members, including board chair Robyn Denholm and former Tesla chief technology officer JB Straubel. SpaceX lists six independent directors.

Musk emphasised that no agreement has been reached on any transaction terms and there is no guarantee that one will be reached. 'The special committees have not reached agreement on terms of any transaction and there's no guarantee that they will,' he said.

Despite the uncertainty, Musk expressed support for the idea. 'I do think there's a lot of merit to combining the companies,' he said, citing potential benefits in superintelligence software development, chip design, robotics, mass-to-orbit capabilities with the Starlink constellation, and connectivity. 'There's lots to be gained from cooperating.'

However, Musk stressed that shareholder approval would be essential. For Tesla, he noted, a merger would require a 50 per cent vote of all shareholders, not just those who participate in voting. 'That's quite a high hurdle to try to achieve,' he said.

The announcement marks an intriguing development for Musk's business empire. Ars Technica reported that SpaceX already acquired Musk's artificial intelligence firm xAI in February, and in June SpaceX went public with what was described as a record initial public offering. The Japan Times reported that Musk's remarks sent SpaceX shares up 4.9 per cent in extended trading.

How it is being reported

• Musk calls Tesla-SpaceX merger a ‘good idea’ as SpaceX posts first profit as a public companyThe remarks sent SpaceX shares up 4.9% in extended trading.The Japan Times · 21 Oct, 00:29
• SpaceX and Tesla boards form special committees to review mergerElon Musk likes the idea but says he is not on either committee, which is made up of independent directors.TechCrunch · 20 Oct, 23:57
• Merging SpaceX and Tesla would be a "good idea," Musk says"I do think there's a lot of merit to combining the companies."Ars Technica · 20 Oct, 23:04
• Elon Musk says Tesla-SpaceX merger would be a 'good idea'Musk says a mega merger would have many benefits to his companies.BBC Business · 20 Oct, 22:50
• Tesla and SpaceX are discussing a possible merger, Musk saysTesla and SpaceX have formed special committees to discuss a possible merger, Elon Musk said during the latter's third quarter earnings call Tuesday. Musk, who serves as CEO of both companies, said the special committees have not reached agreement on the terms of any transaction - and that there's no guarantee that they will. That […]The Verge · 20 Oct, 22:30

In this story: Elon Musk · Tesla · SpaceX · Robyn Denholm · JB Straubel · Ira Ehrenpreis

This summary was written by AI from the headlines and standfirsts above, and states as fact only what at least two outlets report. How we use AI · Report a problem