Elon Musk said on SpaceX’s Oct. 20 earnings call that Tesla and SpaceX had formed special committees of independent board directors to explore a merger. CNBC reported that Musk described the committees as formed at shareholders’ request.
Investor interest preceded the disclosure. Before the call, Reuters reported that “When will SpaceX merge with Tesla?” was the second-most upvoted question submitted for the webcast, drawing 26 upvotes. Reuters also reported that Barclays had suggested a deal could be announced before Tesla’s annual meeting, though neither company nor Musk had committed to favoring a deal at that point.
Musk likes the idea, but left the decision to others. CNBC quoted him saying, “Do I think it would be a good idea? Yes,” and adding that shareholders would have to support a merger. Bloomberg quoted him saying there was “a lot of merit to combining the companies.”
The committees had not agreed on deal terms, and Musk said an agreement was not “a certainty,” according to MarketWatch. The outlet quoted Musk explaining why he was not taking part: “Because I’m a conflicted party, I can’t actually be in the discussions of the special committees.” Shareholder approval would be another hurdle. CNBC quoted Musk saying Tesla would need “a 50% vote of all shares -- not just those who vote -- but of all shareholders,” which he called “quite a high hurdle.”
