OMM Newsroom
Elon Musk said he supports the idea of a merger between “Tesla” and “SpaceX” and that the proposal is under active consideration, BBC reported.
“Do I think it would be a good idea? Yes,” Musk said on Tuesday during a call with financial analysts about “SpaceX”’s quarterly results.
Musk cautioned that a merger should not be taken for granted and would require shareholder support. Special committees at both companies have been formed to consider the proposal.
“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.”
“Tesla” is valued at roughly $1.5 trillion and “SpaceX” at $2 trillion. A merger would rank among the largest in history.
Over the past year, Musk has been bringing more of his companies under fewer corporate 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 effort by “Tesla” and “SpaceX” to manufacture computer chips, was another sign of the companies’ growing cooperation.
Musk said on Tuesday that a full merger would make sense given the work the companies are doing in chips, artificial intelligence, software and other areas.
Musk, who became the world’s first paper trillionaire after “SpaceX” made its stock market debut earlier this year, said he is not a member of either special committee considering the merger.
He described himself as a “conflicted party” because he is chief executive of both “Tesla” and “SpaceX”. Musk compared commenting on a possible merger to “tap dancing through a minefield”.
Shareholders would ultimately decide on a merger. At least 50% of “Tesla” shareholders would need to approve it, a threshold Musk called “quite a high hurdle to achieve”.
Investors have previously backed Musk’s proposals. Last year, a majority of “Tesla” shareholders approved a compensation package for him valued at around $1 trillion.
While “Tesla” is known as an electric car company, Musk has recently been shifting resources there towards robotics.
“SpaceX” quickly overtook “Tesla” in market value after its stock market debut. The company, which builds space rockets and “Starlink” internet satellites, is also expanding into providing cloud computing capacity to technology companies including “Anthropic” and “Google”.
That business is now “SpaceX”’s most profitable, generating $7.5 billion, according to its latest quarterly results.
