Elon Musk has said SpaceX and Tesla are exploring a possible merger that would unite two of his biggest companies in a deal valued at about $3.5 trillion.
The companies have set up special committees to examine the proposal, although no agreement has been reached. Musk said the idea had “a lot of merit” because of their complementary work in artificial intelligence.
Speaking on a SpaceX earnings call, Musk said any proposal would first need to be developed and then put to shareholders. A merger would require the support of at least 50 per cent of Tesla shareholders, he said.
“Some people out there assume that a SpaceX and Tesla merger is a certainty, and I think that would be overstating it,” Musk said.
He added: “Do I think it would be a good idea? Yes. But at the end of the day, the shareholders have to be supportive of this.”
Potentially largest corporate merger
A SpaceX-Tesla deal would be the biggest corporate merger in history, surpassing the $1.25 trillion union between SpaceX and xAI in February.
At current valuations, SpaceX is the world’s seventh-largest company and Tesla the 11th-largest, giving them a combined market capitalisation of about $3.5 trillion.
Jerayr Haleblian, a mergers and acquisitions expert at the University of California, Riverside, said the proposal had “sound logic” behind it.
He said the businesses shared expertise in manufacturing, robotics, artificial intelligence and energy infrastructure, adding that there could be significant information transfers between them.
Shares rise after merger comments
SpaceX shares rose by more than 8 per cent in after-hours trading after Musk’s remarks, while Tesla shares gained 1.8 per cent.
The comments came as SpaceX reported its first quarterly profit, supported by growth in its artificial intelligence and satellite-internet divisions.
Net profit reached $4.4 billion in the July-to-September quarter, compared with a net loss of $1.05 billion a year earlier.
Profit for the first three quarters totalled $413 million, reversing a loss of $2.59 billion over the same period the previous year.
