Elon Musk says Tesla-SpaceX merger is under active consideration

Elon Musk said on Tuesday that a merger between Tesla and SpaceX is under active consideration, telling financial analysts he thinks combining the two companies would be a good idea.

"Do I think it would be a good idea? Yes," Musk said during a call with analysts following SpaceX's quarterly business results. He cautioned that such a merger should not be assumed and would need shareholders' support, adding that special committees within both companies have been formed to examine the move.

"The special committees have not reached agreement on terms of any transaction and there's no guarantee that they will," Musk said. "But I do think there is a lot of merit to merging and a lot to be gained."

With Tesla valued at roughly $1.5 trillion and SpaceX at $2 trillion, a combination of the two would rank among the largest mergers in history.

A wider consolidation drive

Over the past year, Musk has moved to bring more of his companies under fewer banners. Before SpaceX went public earlier this year, it acquired xAI and X, the platform formerly known as Twitter, both of which Musk owned.

The recent launch of Terafab, a joint Tesla-SpaceX effort to manufacture computer chips, was another sign that Musk sees his companies as potentially more effective when working together. He said a full merger would make sense for the work each company is doing on chips, artificial intelligence, software and more.

Conflicts and shareholder hurdles

Musk, who became the world's first paper trillionaire after SpaceX's stock market debut earlier this year, said he is not part of either special committee. He described himself as a "conflicted party" as chief executive of both companies, and said that even commenting on the possibility of a merger felt like "tap dancing through a minefield".

Any deal would ultimately be decided by shareholders. At least 50% of Tesla's shareholders would need to approve the merger, a threshold Musk called "quite a high hurdle to achieve". Shareholders have backed Musk's wishes before: last year, a majority of Tesla investors approved a compensation package for him valued at around $1 trillion.

Two companies in transition

Tesla, best known as an electric car maker, has lately been shifting resources toward robotics. SpaceX, which builds space rockets and Starlink internet satellites, quickly overtook Tesla in stock market value after its debut.

SpaceX is also expanding into offering cloud compute capacity for other tech companies, such as Anthropic and Google. That line of business is now the most profitable part of SpaceX, bringing in $7.5bn according to the latest quarterly results.

Source: BBC Business.