Benzinga | Dec 2, 2020 03:09AM EST

Elon Musk Says Tesla Open To Merger With Legacy Automakers But Won't Attempt Hostile Takeover

Tesla Inc (NASDAQ:TSLA) CEO Elon Musk said Tuesday the electric vehicle maker is open to merging with a legacy carmaker in theory but such a transaction would have to be friendly and not hostile.

What Happened: Musk made the disclosure in an interview with Mathias Doepfner, CEO of the German publishing house Axel Springer SE during a live event, first noticed on CNBC.

"I think we're definitely not going to launch a hostile takeover," Musk told Doepfner. "If somebody said, 'hey, we think it would be a good idea to merge with Tesla,' we'd certainly have that conversation. But we don't want it to be a hostile takeover situation."

The two executives were discussing a purely theoretical scenario.

Why It Matters: As of last month, Tesla's valuation is greater than all the legacy automakers -- including General Motors Company (NYSE:GM), Ford Motor Company (NYSE:F), and Fiat Chrysler Automobiles NV (NYSE:FCAU) -- put together.

Musk is reportedly also calling upon employees to take significant cost-cutting measures. The CEO described Tesla's line of business as a "tough Game of Pennies" in a memo and warned employees that if they do not slash costs "[Tesla] stock will immediately get crushed like a souffle under a sledgehammer!"

Price Action: Tesla shares closed nearly 3% higher at $584.76 on Tuesday and fell 1.59% to $575.48 in the after-hours session.

Photo by Daniel Oberhaus on Flickr