Some of the people working on a possible SpaceX-Tesla merger worry that Elon Musk’s public comments could draw shareholder scrutiny and delay the process by several weeks, Reuters reported on Thursday. Milana Vinn of Reuters heard this from a person with direct knowledge of the talks.

On Tuesday, Musk told SpaceX’s earnings call that both companies had formed special committees of independent directors to study a merger. He also said a merger would be a good idea. Reuters’ source called that disclosure a “mess” for the process, because it could raise questions about how well Tesla shareholders’ interests are represented. TNW has not independently verified Reuters’ report.

“Because I’m a conflicted party, I can’t actually be in the discussions of the special committees,” Musk said on the call.

On the SpaceX webcast, he said the committees were set up at the request of shareholders and had not agreed any terms. A deal would need the backing of 50% of all Tesla shares, counting those that do not vote. He called that “quite a high hurdle”. Calling a merger a certainty would be “overstating it”, he added.

“Do I think it would be a good idea? Yes. But at the end of the day, the shareholders have to be supportive of this,” Musk said.

Musk did not name the committee members. Tesla has seven independent directors, including chair Robyn Denholm, according to its proxy filing. Ira Ehrenpreis also sits on SpaceX’s board. In September, Musk called the question of why the two were still separate companies a “great question”.

Tesla took no questions on the merger on its own earnings webcast a day later. Musk added nothing.

“I think I said everything that should be said yesterday, tap dancing through a minefield there,” Musk said.

The structures on the table

The companies have hired advisers, but the talks are at an early stage, three sources told Reuters. SpaceX approached Tesla in recent weeks, a person familiar with the matter said. The options include SpaceX buying Tesla or the two merging under a new holding company. The companies are also weighing how to pay, including an all-stock deal.

Advisers are also in contact with Musk’s lawyers to make sure he stays out of the talks, the person said. Musk owns nearly a fifth of Tesla and just under half of SpaceX, according to Reuters. SpaceX is worth about $2 trillion and Tesla nearly $1.5 trillion, so a deal would be the largest ever.

A race against the calendar

There is also a push to announce a deal by the first half of 2027, so that it closes while Donald Trump is still president, people familiar with the matter told Bloomberg. The timing depends on when Tesla’s board is comfortable with the details, they said. TNW has not independently verified that report either.

Approval should be easier at SpaceX, where Musk controls more than 80% of the voting power, Bloomberg reported. Tesla is harder, because Musk owns about a fifth of its stock. Bloomberg also reported that Tesla has pushed its engineers to switch from Anthropic’s Claude to SpaceX’s Grok models for coding.

A deal could also add more than $110 billion to Musk’s fortune if it counted as a change in control under his Tesla pay awards, according to Bloomberg Billionaires Index calculations. That would let about 286 million of his Tesla shares vest at once, rather than in January 2028. Whether it applies depends on how the deal is structured.

The SolarCity precedent

Some people involved see parallels with Tesla’s 2016 purchase of SolarCity, the solar company founded by Musk’s cousins, Reuters reported. Shareholders sued, arguing Musk had steered that deal to rescue his investment. The courts upheld it as fair, but the case took years, and Tesla directors settled related claims for $60 million.

Tesla has since moved its incorporation from Delaware, where that case was heard, to Texas.

“The Texas thing is a wild card. No one knows how Texas deals with cases like this because Texas never dealt with cases like this,” Eric Talley told Reuters.

Talley, a law professor at Columbia University, said Musk’s comments so far were not necessarily a problem. A merger could even help shareholders by ending the split of Musk’s time between two companies, he said. The litigation risk would come down to the terms, he said.

Regulators and Terafab

A deal would also face regulators around the world, given Tesla’s business in China and SpaceX’s work on US defence and AI, Reuters noted.

The two companies already have business ties. Tesla’s new Roadster was developed with SpaceX and uses thrusters. Both companies are building the Terafab chip plant in Texas, and Intel is also involved. On Tesla’s webcast, Musk said Terafab aims to make its first test chip around May or June next year, with volume production around the third quarter of 2028.

He put the equipment cost at “tens of billions” of dollars, and said Tesla and SpaceX still have to work out who pays for what. Barclays suggested last week that the companies could announce a deal before Tesla’s annual meeting in December, Reuters reported.