SpaceX and Tesla form committees to explore merger

SpaceX and Tesla each created special committees of independent directors to examine a possible merger, a move requested by shareholders. Elon Musk, who is CEO of both firms and a majority shareholder in SpaceX, said he cannot participate in the committees because of a conflict of interest. Tesla announced the committee through a proxy filing, while SpaceX disclosed the formation during its quarterly earnings call.

Committees announced

Musk has said the merger could be attractive because the two companies share goals in AI, robotics, and space‑orbit infrastructure, and could benefit from joint chip production and other collaborative projects. He also cautioned that a merger is not guaranteed, noting that it would still need approval from shareholders.

Shareholder approval presents different hurdles for the two firms. SpaceX, where Musk holds more than 50% voting power, would likely secure the necessary votes. Tesla, however, would need a 50% vote of all outstanding shares, a higher threshold that could be difficult to meet. The merger could also dilute the value of shares held by index funds.

A merger could reduce the value of those holdings and alter the voting power of Tesla shareholders if Musk’s stake increased.