SpaceX has confirmed that a merger with Tesla would need the approval of Elon Musk, its controlling shareholder and CEO of Tesla, according to a regulatory filing on October 22. Musk has stepped back from direct negotiations between the two companies to avoid conflicts of interest, the filing said.
The statement follows Musk's public comments on October 20, where he called a combination "a good idea." Both companies have established special committees to study the potential transaction, but SpaceX's filing stressed that no decision has been made and that any deal would require further approvals from the committees, boards, and the controlling shareholder.
Wall Street analysts are split on the likelihood and terms of a merger, with some arguing it is only a matter of time. The key question, they say, is the exchange ratio and how much value Tesla shareholders would receive. Reuters reported earlier on October 22 that Musk's public endorsement of the plan, which could value the combined entity at around $3.5 trillion, has unsettled some insiders involved in the talks.
Concerns over shareholder interests
According to a person familiar with the negotiations who spoke to Reuters, Musk's public remarks have created "trouble" for the process, as they may invite scrutiny from Tesla investors and delay the merger by weeks. The source questioned whether Tesla shareholders' interests would be adequately protected in any deal.
The potential merger would bring together Tesla's electric vehicle and energy business with SpaceX's space exploration ventures, but the move raises significant governance and valuation questions. Musk's dual roles as CEO of both companies and his majority stake in SpaceX complicate the decision-making process.
Neither company has provided a timeline for further discussions, and the special committees are still evaluating the feasibility and structure of a possible transaction. The regulatory filing did not specify any financial terms or a proposed share exchange ratio.
As of now, no formal proposal has been submitted to shareholders, and the outcome remains uncertain. The story was first reported by Reuters and republished by Chinese outlet Gasgoo, according to the source material.