Tesla and SpaceX Form Merger Committees as Musk Requires Support From 50% of Shares
Key Facts
Elon Musk confirmed that Tesla and SpaceX had formed special committees to review a potential merger, Reuters reported, following an earlier Tesla investment in the space company's shares. Musk said the deal requires support from 50% of all outstanding Tesla shares, according to Investing.com, tying its progress to shareholder approval. He added that he could not participate in the committees' discussions because of a conflict of interest, saying: "I cannot participate in the discussion." Negotiations remain at an early stage, with no guarantee of an agreement, according to the website. The committees are reviewing a potential combination of the companies, while Musk remains outside their discussions and requires the necessary support from Tesla shares.
Before the committees' formation was confirmed, Barclays outlined a scenario in which SpaceX would acquire Tesla through a share swap, according to Investing.com's account of its analysis. Under the scenario the bank considered most likely, Tesla shareholders would receive SpaceX shares in exchange for their holdings. This structure remains an analytical forecast by Barclays, rather than announced terms for the merger under review by the special committees. On the regulatory front, the website's summary of the bank's note highlighted antitrust scrutiny as a potential obstacle to the deal. It also cited the relationship between SpaceX's U.S. defense contracts and Tesla's Chinese factories as another potential regulatory obstacle. The bank's analysis thus addressed the form of consideration shareholders might receive and the regulatory barriers a combination of the companies could face.
Financial ties between the companies preceded the announcement of the merger committees, with Tesla completing an investment of about $2.00 billion to purchase SpaceX shares on March 12, 2026. In its amended filing, Tesla identified the shares it purchased as Class A common stock in the space company. The investment followed another transaction that brought Musk businesses under SpaceX's umbrella, according to the same filing. On February 2, 2026, SpaceX acquired xAI Holdings, which became its wholly owned subsidiary through the merger. The acquisition of the artificial intelligence company thus preceded the completion of Tesla's investment in SpaceX, before the announcement of a review of a potential merger between the companies.
The announcement of the committees comes alongside a turnaround in SpaceX's results in the third quarter of 2026, when revenue reached $14.6 billion, according to the Associated Press. The news agency said revenue rose 161% from the same period a year earlier. The company posted net income of $4.4 billion for the quarter, or 35 cents a share. For comparison with the previous quarter, SpaceX recorded revenue of $7.8 billion in the second quarter, according to Reuters. It also recorded a net loss of $541 million in that quarter before turning a profit in the third quarter. Its capital expenditure on artificial intelligence reached $15.8 billion in the second quarter, according to figures reported by Reuters.
In trading, SpaceX shares rose 2.2% after the market close on the day its results were announced, October 20, 2026, according to the Associated Press. The move came in the after-hours session, the period the company had previously designated for publishing its third-quarter financial results. SpaceX investor relations had announced that the release would be issued after the market close on Tuesday, October 20, 2026. The published results included year-on-year revenue growth and a net profit for the period, according to the news agency. A comparison with the previous quarter places those profits after the second-quarter loss, when lower revenue coincided with capital expenditure on artificial intelligence of $15.8 billion.
The next scheduled events center on Tesla, which set the release of its third-quarter financial results for after the market close on Wednesday, October 21, 2026, according to an investor relations statement. The company had already announced deliveries of more than 486,000 vehicles during the third quarter in its update on production, deliveries and energy product deployments. In the same update, it announced deployments of 13.7 gigawatt-hours of energy storage products during the period. Tesla's results are scheduled for the day after SpaceX's designated date for announcing its third-quarter results. After that, Tesla scheduled its annual shareholder meeting for December 3, according to Reuters coverage published on October 19, 2026.