Tesla and SpaceX Begin Merger Talks; Announcement Could Come This Year

[Financial News] Elon Musk, who serves as CEO of both the U.S. automaker Tesla and the space company SpaceX, officially announced that he is considering a merger of the two companies. A merger could produce synergies in artificial intelligence (AI), and an announcement could come as early as this year.
According to local media outlets including CNBC, Musk said at a remote meeting held after SpaceX's earnings announcement on the 20th (local time) that, at shareholders' request, special committees to review a merger had been established at the boards of both companies. He said the committees were made up of outside directors and that he would not participate in merger discussions because of his status as an interested party.
Musk said, “If you ask whether I think this (the merger) is a good idea, the answer is ‘yes.’” He cited the companies' business areas—including software, semiconductors, robotics and satellite internet—and the pace of AI development, and stressed that a merger would create significant synergies. He added, “Ultimately, shareholders have to support it,” and cautioned, “Some people assume a SpaceX-Tesla merger is a sure thing, but I think that's an exaggeration.” For a merger to proceed at Tesla, 50% of all shareholders must vote in favor.
Earlier, analyst Dan Levy of the British bank Barclays noted in an investor report on the 16th that Tesla must hold its annual shareholder meeting by December 6 under securities regulator rules. He said it would be timely to hold a merger vote at that meeting and predicted that if this year's vote falls through, it could take place within six to 12 months.
Musk currently owns about 20% of Tesla and about 48% of SpaceX. He holds “Class B” shares in SpaceX with multiple voting rights, giving him the ability to exercise about 82% of the voting rights. SpaceX has a market capitalization of about $2.1 trillion (about 2,782 trillion won), while Tesla's is $1.5 trillion (about 1,987 trillion won). If SpaceX acquires Tesla at those valuations, Musk would own about 37% of the merged company and hold 56% of its voting rights.

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