Musk backs SpaceX-Tesla merger as rocket firm reaches profitability

Elon Musk has signalled backing for a possible combination of SpaceX and Tesla, marking a significant shift in the structure of his sprawling business empire. Special committees comprising independent directors have been established at both companies to examine the merger proposal, which emerged from shareholder advocacy.

The timing of the announcement coincides with SpaceX's transition into sustained profitability, strengthening the commercial case for any potential transaction. The rocket manufacturer has become a major player in satellite communications and space launch services, complementing Tesla's position in electric vehicles and energy storage.

Merger discussions between companies controlled by the same entrepreneur are not unprecedented, though combining entities of this scale and complexity would present substantial regulatory and operational challenges. Any transaction would likely require approval from shareholders and regulators across multiple jurisdictions.

The independent director committees are expected to conduct comprehensive evaluations of the proposal's financial, operational and strategic implications. No timeline has been provided for their review process or any preliminary conclusions.