Elon Musk said Tesla and SpaceX have each formed special committees to consider a merger. He said the committees have not agreed on terms, and a deal would need shareholder support, including a 50% vote of all Tesla shares.
Elon Musk said on SpaceX's Tuesday earnings call that special committees at Tesla and SpaceX are weighing a merger. According to BBC News, he said: "Do I think it would be a good idea? Yes," but he noted that a deal should not be assumed.
Committees have no agreed terms yet
Musk said the committees have not reached agreement on terms of any transaction and that there is no guarantee they will. He added that he sees a lot of merit in merging.
Both committees consist of independent directors, according to CNBC, which reported that Musk said they were formed at the request of shareholders. Musk said he cannot take part in the discussions because he is a conflicted party.
Tesla shareholders face a high bar
On the Tesla side, Musk said a deal would need a 50% vote of all shares, not just those who vote. He called that a high hurdle, according to Business Insider.
Tesla shares are down about 17% this year as of Tuesday, CNBC reported. The automaker is scheduled to report third-quarter results on Wednesday.
The two companies already do business
Tesla invested $2 billion into xAI, which later converted into shares of SpaceX, CNBC reported. SpaceX's AI unit also spent about $430 million last year on Tesla's Megapacks and $143 million on Cybertrucks.
Sources: BBC News, Business Insider, CNBC
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