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SpaceX and Tesla boards form special committees to review merger
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- DeepHorus
The boards of SpaceX and Tesla have formed special committees of independent directors to review a potential merger. The committees were created at shareholders' request, according to Elon Musk, CEO and largest individual shareholder of both companies. Musk is a conflicted party and cannot participate in discussions.
Musk said on SpaceX's third-quarter earnings call that he supports a merger but cautioned it is not guaranteed. "Some people out there assume that a SpaceX and Tesla Motor is a certainty, and I think that would be overstating it," he said. He added shareholders must support any deal, and the committees have not agreed on terms.
Tesla's seven independent directors include chair Robyn Denholm, Ira Ehrenpreis, JB Straubel, Joe Gebbia, Jack Hartung, James Murdoch, and Kathleen Wilson-Thompson, per an October 19 proxy filing. SpaceX's six independent directors are Ehrenpreis, Randy Glein, Donald Harrison, Steve Jurvetson, Luke Nosek, and Roelof Botha. Neither Musk nor his brother Kimbal is independent. Antonio Gracias is not independent; he founded Valor Equity Partners, which holds a 3.4% SpaceX stake and financed SpaceX's AI hardware purchases.
SpaceX's IPO cemented Musk's grip with more than 50% voting power, easing shareholder support for a merger. At Tesla, the hurdle is bigger: a 50% vote from all shareholders, not just those who vote, is required, Musk noted. No transaction terms have been agreed.
Musk called the arrangement an "odd kabuki dance where two groups of people are talking, and I can't be in the conversation." He sees "a lot of merit" in combining the companies as they approach the "superintelligence singularity." Potential gains include AI software, robotics, SpaceX's Starmind orbital AI data center, and Terafab, a joint chip manufacturing project.
The merger's fate remains uncertain. Shareholder approval remains critical. Musk's support does not ensure a deal; the special committees continue review.
