SpaceX and Tesla Are Discussing a Merger — Musk

At the request of shareholders, the boards of directors of SpaceX and Tesla have formed special committees to discuss a potential merger, said Elon Musk, CEO of both companies, during a conference call regarding SpaceX’s quarterly earnings report, according to Bloomberg. This is a step toward a deal that could become the largest corporate merger in history, the agency notes.

The billionaire said he is not participating in the discussions due to a conflict of interest. “It’s like I’m doing a tap dance through a minefield,” he said. According to him, the committees have not yet reached an agreement on the terms of the deal, and it should not be considered a foregone conclusion. Tesla will need the support of shareholders holding 50% of all shares, not just a majority of those voting, he warned, adding that “that’s a pretty high bar.”

“I really do see many arguments in favor of merging companies: we’ve practically reached the singularity of superintelligence, and collaboration could bring us a lot,” Musk said, referring to the development of software, chips, and other areas. — “Do I think it’s a good idea? Yes. But ultimately, the shareholders have to support it.”

Following this announcement, Tesla shares jumped 1.3% in after-hours trading. SpaceX shares accelerated their gains to nearly 5% during the conference call.

On Wednesday, October 21, after the market closes, investors will be waiting for another statement from Musk: Tesla is set to release its quarterly results.

The scale of the potential merger is enormous: SpaceX has a market value of about $2 trillion, while Tesla’s is nearly $1.5 trillion. The deal would combine Tesla’s businesses in electric vehicles, energy, and robotics with SpaceX’s rocket launches and satellite internet. At the heart of it all are the two companies’ shared ambitions in the field of artificial intelligence, which are driving investment in areas such as data centers and self-driving cars, notes Bloomberg.

The merger could be announced before the electric vehicle manufacturer’s annual shareholders’ meeting, which is scheduled to take place no later than December 6, Barclays analysts wrote last week. They called such a deal the most likely scenario but warned that the shareholder vote would be the main hurdle.

Rumors of a possible merger were fueled by the unveiling of the "flying" Roadster hypercar, in which Tesla used SpaceX rocket technology to perform stunts.

This article was AI-translated and verified by a human editor