Elon Musk Confirms SpaceX, Tesla Exploring Merger Talks

Elon Musk Announces SpaceX and Tesla Merger Talks

Elon Musk announced that SpaceX and Tesla have formed special committees to explore a possible merger. During SpaceX's earnings call on October 20, Musk said the committees include independent directors from both companies. He noted that while he sees value in merging the firms, there is no guarantee of an agreement. "I think some people out there assume that a SpaceX and Tesla merger is a certainty, and I think that would be overstating it," Musk said.

The discussions arise as both companies have significant overlaps. They share investments in artificial intelligence and semiconductor manufacturing. SpaceX's market value is about $2 trillion, while Tesla is valued at nearly $1.5 trillion. Musk mentioned that any merger would need strong shareholder support, especially a 50% vote from Tesla shareholders. He called this a "quite high hurdle."

Musk, who owns a 20% stake in Tesla and 45% in SpaceX, is not part of the committee talks due to his conflicted status. He described the situation as an "odd kabuki dance," where he cannot be involved in the discussions. The potential merger has been a topic of speculation since SpaceX's initial public offering in 2025, which sparked investor interest in both companies.

After the announcement, SpaceX shares rose by about 4.6%. Tesla's stock climbed around 1.2% in after-hours trading. The companies have worked together on various projects, including AI software, chip design, and the TeraFab manufacturing initiative.

Related coverage: SpaceX Reports $14.58 Billion Revenue Amid AI Spending Surge.

Based on reporting by: businesstimes.com.sg, nbcnews.com