'Tesla and SpaceX' Could Become One Company? Special Committees Set Up to Review Merger

Elon Musk, who serves as CEO of both U.S. automaker Tesla and space company SpaceX, officially announced that he is considering a merger of the two companies. A merger is expected to create synergies in artificial intelligence (AI), and an announcement could come as early as this year.
According to CNBC and other local media, Musk said at a remote meeting held after SpaceX’s earnings announcement on the 20th (local time) that, at shareholders’ request, each company’s board had established a special committee to review a merger. He said the committees were made up of outside directors and that he would not take part in merger discussions because of his status as an interested party.
“If you ask whether I think this (the merger) is a good idea, the answer is ‘yes,’” Musk said. Citing the companies’ areas of business, including software, semiconductors, robotics and satellite internet, as well as the pace of AI development, he stressed that a merger would create significant synergies. He added, “Ultimately, shareholders have to support it,” and pushed back against the idea that a merger was certain: “Some assume a SpaceX-Tesla merger is a sure thing, but I think that’s a gross exaggeration.” For Tesla, a merger would require votes in favor from 50% of all shareholders.
Earlier, Dan Levy, an analyst at British bank Barclays, noted in an investor report on the 16th that securities regulations require Tesla to hold its annual shareholder meeting by December 6. He said it would be timely to hold a merger vote at that meeting and predicted that if a vote this year did not go ahead, it could take place within 6 to 12 months.
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 were to acquire Tesla at that price, Musk would hold about 37% of the merged company’s equity and 56% of its voting rights.
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