Elon Musk, the CEO of both Tesla and SpaceX, revealed on Tuesday (October 20) that the two companies are in discussions about a possible merger. According to CNBC, Musk disclosed during SpaceX’s third-quarter earnings call that special committees have been set up by the boards of directors of Tesla and SpaceX to discuss the potential merger in response to shareholder requests.
The committee, composed of independent directors, was formed because Musk cited conflicts of interest that prevent his direct involvement in the discussions. Musk emphasized that while the committee has not reached any agreement on the terms of the transaction, nor can guarantee a final agreement, he believes that a merger between the two companies would bring significant value.
The market’s interest in the potential merger of Tesla and SpaceX is not just due to their common ownership under Musk, but also includes their business developments in areas such as artificial intelligence, chip design, robotics, and communications. Musk sees opportunities for collaboration between the two companies in super-intelligent software, chip design, robotics, and communications technologies, with integration expected to yield greater benefits. As both companies expand their focus into AI-related fields, the merger concept has become a focal point for investors.
Musk stressed that the ultimate decision lies with the shareholders. For Tesla, a merger deal would require the support of 50% of all outstanding shares, not just half of the voting shares, setting a high threshold for approval.
This represents Musk’s clearest statement to date on the issue of a potential merger. When questioned about this after SpaceX’s initial public offering in July, he had not indicated support or opposition at that time.