Tesla and SpaceX form committees to explore $3.5 trillion merger

Tesla and SpaceX have formed special committees of independent board members to explore a possible merger of the two companies, Elon Musk said during SpaceX's third-quarter earnings call. The committees were created at the request of shareholders.

Musk, who is CEO of both companies, said he cannot participate in the committee discussions because he is a conflicted party. He owns roughly 20 percent of Tesla and 45 percent of SpaceX, and controls about 82 percent of SpaceX's voting power.

“It's an odd kabuki dance where two groups of people are talking and I can't be in the conversation.”

The committees have not reached any agreement on transaction terms, and Musk said there is no guarantee they will. He cautioned that assuming a merger is certain would be overstating it.

A combined company would be worth about $3.5 trillion at Tuesday's closing prices, according to Fortune. Tesla's annual shareholder proxy report filed on Monday does not include a merger proposal for a shareholder vote.

Electrek noted that SpaceX held its quarterly earnings call just months after its initial public offering in June. The outlet also said the merger could dilute shareholders and retirement savings tied to major stock indices.