Musk Says Tesla-SpaceX Merger Needs Majority of All Tesla Shares

Tesla and SpaceX CEO Elon Musk said Tuesday that a merger would require approval from holders of more than half of all Tesla shares, as both companies set up committees to consider a deal.

Each committee comprises independent directors and was formed at shareholders’ request. Musk said his role at both companies keeps him out of their discussions. The committees have not agreed on terms, and a transaction is not guaranteed.

SpaceX (SPCX) ended Tuesday’s after-hours session at $159.70, about 8% above its $147.79 regular-session close. Tesla closed at $373.71 and traded at $380.29 after hours, a gain of about 1.8%.

SpaceX recorded $14.6 billion in third-quarter revenue, up 161% from a year earlier, and $4.4 billion in net income. Musk described potential benefits from combining work on AI software, chip design, robotics and connectivity. The companies are already cooperating on Terafab, a proposed chip plant in Texas.

The two committees would need to agree on a proposal before shareholders could vote. A merger vote is not on the agenda for Tesla’s Dec. 3 annual meeting.