Musk Confirms SpaceX, Tesla Special Committees Evaluating Potential Merger

Elon Musk confirmed Tuesday that SpaceX and Tesla have each formed special committees of independent directors to evaluate a potential merger. Musk, who serves as CEO of both companies, said he supports a combination and believes it "would be a good idea," but cautioned that a deal is not assured. Speaking on SpaceX's earnings call, Musk said his conflict of interest prevents him from directly participating in merger discussions. The two companies have deepened collaboration on chip and artificial intelligence projects, fueling months of market speculation that a transaction is inevitable. Following the comments, SpaceX (SPCX-US) shares jumped about 5% in after-hours trading, while Tesla (TSLA-US) rose roughly 1.1%. Musk downplayed the certainty of a deal, noting it would require Tesla shareholder approval and describing the voting threshold as high. Barclays analyst Dan Levy wrote last Wednesday (14th) that expectations are rising as the companies' businesses increasingly overlap. Barclays estimates SpaceX would act as acquirer in a stock-funded deal, with each Tesla share exchangeable for about 0.7 SpaceX shares before any acquisition premium.