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Elon Musk recused himself from the SpaceX-Tesla merger talks. His company’s SEC filing suggests that doesn’t mean much.
SpaceX’s October 22 10-Q disclosed that any potential combination with Tesla “would be subject to further approval by our special committee, our board of directors and our controlling shareholder.” Musk controls roughly 85% of SpaceX’s voting power. He is the controlling shareholder.
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Both companies formed special committees on October 20 to evaluate a proposed deal analysts estimate could create a combined entity worth around $3.5 trillion. Musk described staying out of the talks as “an odd kabuki dance where two groups of people are talking, and I can’t be in the conversation.” The filing language suggests he’ll have the last word anyway.
He’s also already been in the conversation. Reuters reported that Musk’s public endorsement of the deal earlier this month created a “mess” for the independent process, with insiders saying it complicated the special committees’ ability to negotiate at arm’s length.
Critics are pointing to Tesla’s 2016 SolarCity acquisition—another conflicted transaction that cleared Delaware courts—as the closest governance precedent. SpaceX’s own investor disclosures have flagged Musk’s overlapping interests as a material risk.
Tesla shareholders must clear a 50%-of-all-outstanding-shares threshold—not a simpler majority of votes cast—a standard Musk himself called “quite a high hurdle.” REX Financial estimates the merged company would give him roughly 57% of combined voting power.
Tesla’s annual meeting is December 3.
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