Two Independent Committees Weigh Potential Tesla-SpaceX Merger as Terms Remain Unsettled
Key Facts
SpaceX said it had formed a special committee of its board to evaluate a potential merger with Tesla, adding that Tesla’s board had formed an independent committee of its own, moving the discussion from speculation to a formal governance review. SpaceX said in its quarterly filing with the Securities and Exchange Commission that its committee’s formation was announced during the earnings call on October 20, 2026. Tesla said in its quarterly filing that its committee comprises disinterested directors and is considering deepening its relationship with SpaceX, which could include commercial arrangements or a merger. The SpaceX committee has not made a decision on a deal, and there is no agreement on its terms or structure. Any potential agreement remains subject to reviews by both committees and approval by the boards and shareholders, as required.
Musk described himself as a conflicted party and said he could not participate in the committees’ discussions. The Associated Press quoted him as saying that some people’s assumption that a SpaceX-Tesla merger was "a sure thing" was an overstatement. He also noted that shareholder approval would be required, making the ongoing review a preliminary step rather than an announcement of a completed deal. The available disclosures have not specified a price, a share-exchange ratio or which party might acquire the other. Analysts have floated an exchange of Tesla shares for SpaceX shares as one possible scenario, but it has not become an agreed set of terms.
The question of consideration stands out because of the large gap between the companies’ valuations. Reuters valued Tesla at about $1.5 trillion and said any potential premium could reach hundreds of billions of dollars. RBC and JPMorgan analysts expected investors to seek a premium of between 20% and 35%, while some analysts did not expect a premium. These are estimates and analyses of a potential deal, not terms approved by the companies’ boards. The Associated Press estimated the companies’ combined market value at about $3.5 trillion at the time of its report on October 21.
Interest in a deal reflects the overlap between the companies’ businesses in artificial intelligence and chips. Reuters said Tesla and SpaceX are jointly developing the Terafab chip-manufacturing project, and that artificial intelligence accounts for more than half of SpaceX’s revenue. According to an Associated Press report, SpaceX earned $4.4 billion, or 35 cents per share, on revenue of $14.6 billion in the three months ended September 2026, up 161% from a year earlier. Artificial intelligence was SpaceX’s largest business by revenue, while Starlink remained its biggest source of profit. Reuters said the company could spend an additional $35 billion to $40 billion in the fourth quarter to support its expansion.
Barclays said a potential merger could link the companies’ artificial intelligence platforms, including Tesla’s self-driving cars used in robotaxi services and its humanoid robots, with SpaceX’s models and software. It said a combination could make it easier to govern the Terafab project, which the companies are already working on. Barclays estimated that a potential deal structure could give Musk about 37% of the combined company and 56% of its voting power. Musk owns 11% of SpaceX while retaining majority voting control, and 19% of Tesla, according to the Associated Press. These holdings add complexity to the deal review, in which Musk said he would not participate.
The review comes as the companies reported different financial results for the third quarter of 2026. Tesla posted revenue of $28.05 billion and net income attributable to common shareholders of $787 million, down $586 million from the same period a year earlier. SpaceX, meanwhile, earned $4.4 billion on revenue of $14.6 billion in the same quarter, the Associated Press reported. Reuters noted that some technologies tied to the companies’ valuations, including orbital data centers, large-scale robotaxis and humanoid robots, have yet to reach commercial scale. That raises execution and spending risks if the companies are combined, even as areas of cooperation are already in place.
Shares in both companies gained after news of the committees’ formation and Musk’s comments circulated. Reuters said Tesla shares rose more than 3% and SpaceX shares 11% on Wednesday, October 21. The Associated Press estimated that SpaceX rose 8% and Tesla 3.5% in early afternoon trading the same day. Tesla shares closed at $399.81 on October 30, according to EL7 data. Analysts are watching for regulatory disclosures about the potential talks ahead of Tesla’s annual shareholder meeting scheduled for December 3, 2026; the meeting announcement did not say a merger vote was on the agenda.
Barclays had cited the annual shareholder meeting as a possible factor in the timing of any deal announcement, estimating in its report that a later announcement could imply a 6 to 12-month timeframe. But Tesla’s officially announced meeting date is December 3, 2026, not December 6 as stated in an earlier estimate. Any merger-related step remains subject to committee review and the required shareholder approvals. The percentages and projections Barclays published relate to a hypothetical deal structure and do not establish that the structure has been adopted. So far, the companies have announced no decision or final terms.