Updated version 1 - SpaceX states that a potential merger with Tesla would require Elon Musk's approval.

The full text has been supplemented with details.

Reuters, October 22 - SpaceX (SPCX.O) said on Thursday that its potential merger with Tesla (TSLA.O) would require the approval of controlling investor Elon Musk, even though the entrepreneur has recused himself from negotiations between the two companies due to conflicts of interest.

Musk, the richest man in the world, said on Tuesday that a merger between SpaceX and Tesla would be a "good idea," and noted that both sides have set up a special committee to discuss the matter.

In a regulatory filing submitted on Thursday, SpaceX stated: "Our special committee has not made any decisions regarding any potential merger, and any potential merger would be subject to further approval from the special committee, the board of directors, and the controlling shareholder."

Several Wall Street analysts said that in their view, a merger between Tesla and SpaceX is a question of "when" not "if," but they differed on how much Tesla shareholders should benefit from the deal.

Reuters reported earlier on Thursday that Musk's public endorsement this week of the potential $3.5 trillion merger also made some insiders involved in the discussions uneasy, as they feared his comments might prompt shareholder scrutiny and delay the process by several weeks.

A person directly familiar with the negotiations told Reuters that the disclosure had created "a mess" for the negotiation process, as it could raise questions about whether the interests of Tesla shareholders are being adequately protected.

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