Musk says SpaceX and Tesla have formed special committees to explore a merger

SpaceX and Tesla have each formed a special committee of independent directors to examine a possible merger of the two companies, chief executive Elon Musk said on Tuesday 20 October during SpaceX’s third-quarter earnings call.

Musk, who runs both companies, said the committees were set up at the request of shareholders and that he is not taking part in their discussions because he is “a conflicted party”. “The special committees have not reached agreement on terms of any transaction and there’s no guarantee that they will,” he said, according to the BBC. Asked whether a combination would be a good idea, he said: “Yes,” citing shared work on artificial intelligence software, chips, robotics and launch.

Musk said assuming a merger was certain “would be overstating it”. He said any deal would need the backing of 50% of all Tesla shareholders, not only those who vote, which he called “quite a high hurdle”.

SpaceX is valued at about US$2 trillion and Tesla at nearly US$1.5 trillion, according to Bloomberg and the BBC, which said a deal would rank among the largest corporate mergers on record.

SpaceX reported third-quarter revenue of US$14.6 billion, up 161% from a year earlier and above analysts’ average estimate of US$12.72 billion, according to LSEG data cited by Reuters. The BBC said its AI computing business brought in US$7.5 billion and Starlink US$5.2 billion. SpaceX shares rose about 8% in after-hours trading, while Tesla shares rose 2%, the BBC reported. Tesla is due to report its own quarterly results on Wednesday.

For this week’s earnings schedule, see our earlier report.