In brief
Elon Musk has expressed enthusiasm for a potential merger between Tesla and SpaceX, the two companies he leads. He highlighted that while the idea is appealing, no definitive decision has been made and shareholders’ approval is essential. Special committees at both firms are currently reviewing the possibility, though no terms have been agreed upon. The proposed union would rank among the largest corporate mergers ever, combining valuations of roughly $1.5 trillion and $2 trillion, respectively.
'Do I think it would be a good idea? Yes.'
Musk said this during a call with financial analysts on Tuesday as Tesla released its quarterly results. He stressed that a merger is still under active consideration but should not be assumed to happen.
Special committees at both Tesla and SpaceX are reviewing the concept; however, no agreement on terms has yet materialised and Musk cautioned that the committees have not reached any binding decisions.
If combined, the two firms would represent a $3.5 trillion entity, making it one of the largest mergers in history. Tesla’s market value stands at roughly $1.5 trillion while SpaceX is valued around $2 trillion.
Musk explained that he is not a member of either committee because of his roles as chief executive of both companies, describing his position as a “conflicted party.”
He compared the potential deal to “tap dancing through a minefield,” acknowledging the inherent risks and uncertainties.
Shareholders would ultimately decide the fate of the merger. Musk noted that a minimum 50% approval from Tesla’s shareholders would be required, which he described as a high hurdle to clear.
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