Musk leaves open the possibility of merger questions... Expansion of equity investments and product transactions
Tesla invests $2 billion in SpaceX... Chinese business and shareholder approval are issues
The line between Tesla and SpaceX is rapidly blurring. With CEO Elon Musk reopening the possibility of a merger between the two companies, equity investment and product transactions are increasing, and large-scale production projects encompassing semiconductors and data centers are being pursued together, and the business areas of the two companies are interlocking in many ways.
This year, there has also been a change in the structure surrounding the merger theory. This is because Space In the past, the picture of Tesla embracing the unlisted SpaceX was mainly discussed, but now there is even a scenario where the larger SpaceX embraces Tesla.
In the last three trading days, SpaceX's stock price rose about 18% and Tesla's rose about 7%. As the business and capital relationships between the two companies become closer, market interest also increased as Musk again left open the possibility of a merger.
“Why are there two separate companies?”... Musk opens up possibility of merger again
On the 15th of last month (local time), Musk was asked whether Tesla and Space He responded that the two companies are already collaborating closely in many fields and that he does not know what choices they will make in the future. Gwynne Shotwell, CEO of Space
This is not the first time the possibility of combining the two companies has been discussed. In Tesla's earnings call last July, Musk mentioned that the areas of overlap between Tesla and SpaceX are increasing, and earlier in January, Bloomberg reported that SpaceX was considering the possibility of combining with Tesla or xAI.
xAI, which was also mentioned as a candidate at the time, was actually acquired by SpaceX. A precedent has been established where Musk goes beyond running multiple companies and collaborating as needed, and merges companies that are aligned in business into one.
Transaction of hundreds of millions of dollars for a $2 billion stake... Tesla and SpaceX are already entangled
Signs that the relationship between the two companies is getting closer can be seen in both capital and business. Tesla initially invested $2 billion in xAI, but when xAI was acquired by Space
Product transactions are already worth hundreds of millions of dollars. Tesla generated sales of $405 million by supplying energy storage system (ESS) megapacks to SpaceX in the first half of this year, and last year, SpaceX and xAI purchased about $650 million worth of Tesla products and services. Among these, xAI's megapack purchase was about $506 million, and SpaceX purchased about $144 million worth of products and services, including the Cybertruck.
Cooperation does not stop at buying and selling individual products. In its investment prospectus, Space It is a plan to secure the semiconductors, data centers, and power infrastructure necessary for Musk's future growth businesses such as AI, robots, and space businesses in the long term. Musk recently confirmed that he is discussing Terrafab cooperation with TSMC, the world's largest semiconductor consignment manufacturer.
The new credit agreement worth $30 billion secured by Tesla last month is also in line with this investment plan. We plan to invest some of the funds into production projects jointly promoted with SpaceX. A movement to jointly lay the foundation necessary to grow Tesla's cars and robots, SpaceX's space business, and xAI's artificial intelligence is taking shape.
SpaceX gets bigger... Changed merger structure
Space In addition to the fact that Musk maintained a much stronger control over Tesla by securing about 82% of voting rights even after listing, the direction of the merger discussed in the market has also changed from the past.
This is not a scenario where Tesla acquires SpaceX, but a scenario where SpaceX embraces Tesla. The Financial Times (FT) analyzed that there could be advantages in terms of capital raising and business integration if the two companies combine after SpaceX is listed.
Of course, there is also the option of maintaining the current relationship without merging the companies. There is also a view that there is no need to endure the complicated procedures and costs of a merger since they already own shares in each other, buy and sell products, and can even pursue joint projects. The Wall Street Journal (WSJ) analyzed that if SpaceX's acquisition of Tesla becomes a reality, it could also affect Musk's performance compensation and control over Tesla.
Conflict between Chinese business and U.S. defense interests... Remaining barriers to merger
The problem of actually combining two companies that are close in business into one company is much more complicated. In particular, Tesla is conducting a large-scale production and sales business in China based on its Shanghai factory, and while China accounts for about 18% of total sales in the first half of this year, Space
SpaceX's Starlink and satellite and launch vehicle businesses are directly connected to U.S. national security. If the two companies merge, Tesla's Chinese production and sales business and Space
In fact, WSJ reported that plans were discussed within Tesla to separate its Chinese business in preparation for future combination with SpaceX. However, since Musk immediately denied the report as ‘fake news,’ it is difficult to say that the separation of the Chinese business is actually being pursued.
In addition, there are still issues that need to be resolved, such as corporate value calculation, merger ratio, and Tesla shareholder approval. It is not yet known whether the merger will actually take place. However, as Tesla became a shareholder of Space
