{"id":3100,"date":"2026-10-22T11:04:23","date_gmt":"2026-10-22T06:04:23","guid":{"rendered":"https:\/\/ipp-news.com\/?p=3100"},"modified":"2026-10-22T11:04:23","modified_gmt":"2026-10-22T06:04:23","slug":"musks-public-endorsement-of-spacex-tesla-deal-may-throw-a-wrench-in-talks","status":"publish","type":"post","link":"https:\/\/ipp-news.com\/?p=3100","title":{"rendered":"Musk\u2019s public endorsement of SpaceX-Tesla deal may throw a wrench in talks"},"content":{"rendered":"
\n

Elon Musk\u2019s public endorsement<\/a> this week of a potential $3.5 trillion merger between SpaceX and Tesla has rattled some insiders involved in the discussions, who worry his comments could invite \u200bshareholder scrutiny and delay the process by several weeks, according to a person with direct knowledge of the talks.<\/strong><\/p>\n

The disclosure created a \u201cmess\u201d for the process, as it \u200ccould lead to questions about how well Tesla shareholders\u2019 interests would be represented, the person said.<\/p>\n

The concerns reflect similarities some participants see with Tesla\u2019s 2016 acquisition of SolarCity, which sparked years of litigation over Musk\u2019s role in the deal.<\/p>\n

Musk, who serves as CEO of both SpaceX and Tesla and owns significant stakes in each company, this week told investors that the two companies were examining what would be the largest corporate transaction in history and revealed that both had \u200bformed special committees to evaluate it.<\/p>\n

The backlash to those remarks is reported here for the first time.<\/p>\n

The parties have hired advisers, but discussions are at an early stage, three sources \u200bfamiliar with the matter said.<\/p>\n

SpaceX approached Tesla in recent weeks, and the companies have been discussing a range of transaction structures, including a SpaceX \u2060acquisition of Tesla or a merger under a newly formed holding company, the person familiar with the matter said.<\/p>\n

They are weighing different forms of merger consideration, including an all-stock deal, the \u200bperson said. These details of the talks have not been previously reported.<\/p>\n

Tesla, SpaceX and Musk did not respond to requests for comment.<\/p>\n

<\/a>Shareholder litigation over Tesla\u2019s Solarcity deal<\/strong><\/h3>\n

In related-party transactions such as a SpaceX-Tesla merger, independent board \u200bmembers typically oversee the process to safeguard public shareholders\u2019 interests.<\/p>\n

That issue loomed large in Tesla\u2019s 2016 acquisition of SolarCity, which triggered years of litigation<\/a> after shareholders alleged the world\u2019s richest man had influenced the process to bail out his investment in the struggling rooftop solar company.<\/p>\n

At the time, Musk owned roughly 22% of both Tesla and SolarCity, which was founded by his cousins.<\/p>\n

Shareholders argued that Musk\u2019s involvement and public support undermined the deal\u2019s fairness. Central to the case were claims that despite his minority stake<\/a>, \u200bMusk was a controlling shareholder of Tesla due to his ties to board members and domineering style.<\/p>\n

The Delaware Supreme Court later noted that plaintiffs\u2019 contention of the absence of an independent committee, together with \u201ccertain \u200bother facts concerning Musk\u2019s involvement in and public support for the transaction,\u201d warranted the finding of unfair dealing.<\/p>\n

The courts ultimately upheld the acquisition as fair, though it took several years for the case to be resolved and Tesla directors \u200csettled allegations for $60 \u2060million.<\/p>\n

<\/a>Musk cannot be involved in talks<\/strong><\/h3>\n

Musk owns nearly a fifth of Tesla and just under half of SpaceX, and analysts have said a merger would give him control of the combined entity.<\/p>\n

On Tuesday\u2019s call with investors, Musk acknowledged that as a conflicted party, he cannot be part of the discussions of the special committees.<\/p>\n

Advisers are also in contact with his lawyers to ensure Musk is recused from the merger discussions, the source familiar with the talks said.<\/p>\n

Eric Talley, a law professor at Columbia University, said a merger could benefit shareholders by eliminating the need for Musk to divide his time between the two companies. \u200b<\/p>\n

He added that any legal challenge may be harder \u200bto predict than the SolarCity case because \u2060Tesla is now incorporated in Texas rather than Delaware.<\/p>\n

\u201cThe Texas thing is a wild card. No one knows how Texas deals with cases like this because Texas has never dealt with cases like this,\u201d Talley said, noting that Texas has sought to establish itself as a business-friendly alternative to Delaware, and Musk\u2019s comments \u200bso far were not necessarily problematic.<\/p>\n

Ultimately, he said, litigation risk would hinge on the terms of any transaction.<\/p>\n

\u201cWho\u2019s going to get the better \u200bside of this deal? And \u2060that\u2019s usually what gives rise to litigation,\u201d Talley said.<\/p>\n

<\/a>Musk\u2019s comments could affect discussions<\/strong><\/h3>\n

People involved in the process worry Musk\u2019s public endorsement of the merger and disclosure of talks could intensify investor scrutiny, as interested parties typically avoid expressing views publicly while independent directors evaluate a deal, the source said.<\/p>\n

The SolarCity case could become a reference point for investors and courts assessing any future SpaceX-Tesla transaction if advisers fail to fully insulate the special \u2060committees from Musk\u2019s \u200binfluence, the source added.<\/p>\n

A tie-up between Tesla and SpaceX would be the biggest deal in history, creating one of the \u200bworld\u2019s largest industrial and technology groups.<\/p>\n

It would surpass Musk\u2019s acquisition earlier this year of his artificial intelligence company xAI by SpaceX, which ranks among the largest corporate transactions ever announced.<\/p>\n

A deal of this size would also face scrutiny from global \u200bregulators, especially due to Tesla\u2019s business in China and SpaceX\u2019s work in US defence and AI.<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Elon Musk\u2019s public endorsement this week of a potential $3.5 trillion merger between SpaceX and Tesla has rattled some insiders involved in the discussions, who worry his comments could invite \u200bshareholder scrutiny and delay the process by several weeks, according to a person with direct knowledge of the talks. The disclosure created a \u201cmess\u201d for the process, as it \u200ccould lead to questions about how well Tesla shareholders\u2019 interests would be represented, the person said. The concerns reflect similarities some participants see with Tesla\u2019s 2016 acquisition of SolarCity, which sparked…<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[19],"tags":[],"class_list":["post-3100","post","type-post","status-publish","format-standard","hentry","category-english"],"gutentor_comment":0,"_links":{"self":[{"href":"https:\/\/ipp-news.com\/index.php?rest_route=\/wp\/v2\/posts\/3100","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ipp-news.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ipp-news.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ipp-news.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/ipp-news.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=3100"}],"version-history":[{"count":0,"href":"https:\/\/ipp-news.com\/index.php?rest_route=\/wp\/v2\/posts\/3100\/revisions"}],"wp:attachment":[{"href":"https:\/\/ipp-news.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=3100"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ipp-news.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=3100"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ipp-news.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=3100"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}