SpaceX disclosed in an October 22 10-Q filing that any merger with Tesla requires approval from its special committee, board of directors, and controlling shareholder. Elon Musk holds approximately 85% of the voting power at SpaceX, effectively making him the controlling shareholder despite his stated recusal from negotiations.
Both companies established special committees on October 20 to assess a potential deal. Analysts estimate the combined entity could reach a valuation of $3.5 trillion. Musk previously noted that he is staying out of the discussions, though he publicly endorsed the merger earlier this month, which reportedly complicated the independent negotiation process.
Governance concerns have emerged regarding the potential transaction, with critics citing the 2016 acquisition of SolarCity as a precedent. SpaceX investor disclosures have previously identified Musk’s overlapping interests as a material risk. The deal faces a significant hurdle, as Tesla shareholders must approve it by a 50% threshold of all outstanding shares.
If the merger proceeds, REX Financial estimates that Musk would control approximately 57% of the voting power in the combined company. Musk himself has characterized the required shareholder approval threshold as a high hurdle for the proposed transaction.
