Musk Confirms Special Committees Formed as Tesla‑SpaceX Merger Talk Gains Momentum

Elon Musk said Tesla and SpaceX have each formed special committees of independent directors to explore a potential merger, disclosing the step during a question-and-answer session on SpaceX's third-quarter earnings call. "Do I think it would be a good idea? Yes, but at the end of the day, the shareholders have to be supportive of this," Musk said, adding that there is "a lot of merit to combining the companies as we are pretty much in the superintelligence singularity". He said he is a conflicted party and will not be included in the committees' discussions, and the committees exclude both Elon and Kimbal Musk.

Musk was careful not to oversell it. According to TechCrunch and 24/7 Wall St., he said the committees were formed at the request of shareholders, have not reached agreement on the terms of any transaction, and that there is no guarantee they will. For Tesla, he said a deal would need a 50% vote of all shares, not just those voting, which he called a high hurdle; at SpaceX, Musk holds more than 50% of the voting power. No price, advisers or timeline were disclosed. Fox Business, citing Reuters, noted that Barclays suggested last week that a deal could be announced as early as December.

The scale is what makes the idea market-moving. At the October 20 close, Tesla was worth $1.48 trillion and SpaceX $2.01 trillion, per 24/7 Wall St., and CNBC said a combination would be the largest merger in history, creating a company worth roughly $3.5 trillion. SPCX closed at $147.79 and moved to $159.70 after hours, a gain of 8.06%, on the combination of the merger comments and a blowout quarter, while TSLA closed at $373.71. CNBC reported both stocks higher in early trading on Wednesday. The companies already cooperate through Terafab, a joint chip venture aiming to test its first SRAM chip by June next year, and SpaceX acquired Musk's AI company xAI in February.

Views split along familiar lines. Deepwater's Gene Munster told CNBC the deal is a "slam dunk" if it comes down to shareholder approval, while MoffettNathanson's Julie Zhu pointed to the "enormous calls on capital" looming at SpaceX. Next to watch: Tesla's own third-quarter report after Wednesday's close, any 8-K naming committee members, advisers or terms, and whether a proposal reaches Tesla holders, whose December 3 annual meeting currently carries no merger item.