Tesla and SpaceX Form Committees to Explore Potential Merger
publishers 121articles 187first reported 19 Oct, 12:15 UTCdeveloping since 19 Oct · 13 editionstop 25 #20
Tesla and SpaceX have formed special board committees to evaluate a potential merger that could create a company valued at roughly $3.5 trillion, according to reports following earnings calls by both companies.
Elon Musk, chief executive of Tesla and SpaceX, publicly endorsed the idea, saying it had “a lot of merit.” Musk said his holdings in both companies make him a conflicted party and prevent him from participating in either committee’s deliberations. Advisers have been hired, but discussions remain at an early stage, the Taipei Times reported, citing people familiar with the matter.
Structures under consideration include SpaceX acquiring Tesla or combining the companies beneath a new holding company. An all-stock transaction is among the options reportedly being weighed.
Approval by Tesla investors could be a major hurdle. Musk controls about 85% of SpaceX’s voting power but roughly 20% of Tesla. He said a deal would require support from holders of a majority of all outstanding Tesla shares, meaning shares that are not voted would effectively count against it. Any valuation and premium offered to Tesla shareholders would also affect support.
The process is drawing scrutiny because of Musk’s roles and financial interests at both companies. Tesla’s 2016 acquisition of SolarCity prompted years of shareholder litigation over similar conflict concerns, although courts ultimately upheld that transaction as fair.
The merger discussions emerged as Tesla reported quarterly results that exceeded revenue and earnings expectations, despite a year-over-year revenue decline and weakness in its automotive business.
HOW THIS STORY WAS MADE
Written from 8 articles, 3 with the publisher's own text; 8 independent newsrooms once syndicated copies count as one; this version written 113 h after the record first saw the story; the editor kept it as written.
- Publishers
- 121
- Source articles
- 187
- Given to the writer
- 8, 3 with the article's own text
- Independent newsrooms
- 8
- This version written
- 113 h after the record first saw the story
- Second model (editor)
- kept as written
- Publication gate
- passed
- Human review
- none
WHAT THE EDITOR DID
The second model checked the writer's draft against the same sources and published it as written.
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