According to Bloomberg, Tesla and SpaceX are gradually approaching the possibility of a merger, with an announcement expected as early as December. The report cites informed sources indicating that the two companies have also discussed delaying the announcement until early 2027. The boards and advisors of both parties are currently negotiating the terms of the deal and the governance structure of the merged company. One unresolved issue is how much of SpaceX's shares Tesla investors will receive.
Bloomberg previously reported that the two companies initially planned to announce the deal in the first half of next year and complete it before the end of President Donald Trump's term. Therefore, if an announcement is made in December, it would be several months ahead of schedule. Following the report, Tesla's stock price rose by as much as 1.9%, reaching US$398.35 (approximately HK$3,107), while SpaceX increased by 0.6%, reaching US$140.63 (approximately HK$1,097). SpaceX's market value after its June IPO is approximately US$1.9 trillion, while Tesla's market value is about US$1.55 trillion; if the two merge, it would become the largest corporate deal in history.
Tesla and SpaceX merger deal would be a historic event
The report mentions that neither company has responded to requests for comment. Negotiations between the two parties became formal on October 20, when Elon Musk stated during SpaceX's third-quarter earnings call that an independent special committee had been established to explore the merger. Elon Musk noted that he could not participate due to being "a party with a conflict of interest," describing the process as "a peculiar musical." He also pointed out that Tesla needs to secure 50% support from its outstanding shares, but the company only received 39.4% support in its 2025 board declassification proposal, falling short of the requirement.
China remains the largest structural issue. Sources from Bloomberg indicate that both companies still need to resolve how to separate Tesla's large and profitable manufacturing operations in China from SpaceX's government and defense contracts in the U.S. JPMorgan analyst Rajat Gupta described these two factors last month as "key dynamics that are contradictory for regulatory and shareholder approval." Elon Musk has repeatedly stated that Tesla has no plans to spin off its China business, reaffirming this position in August, prior to ARK Invest's prediction that a merger announcement would be made within the year.
Washington adds another layer of complexity. The Democrats gained control of Congress in this month's midterm elections and have pledged to investigate Elon Musk's business and political activities, which could bring additional scrutiny to the deal involving one of the Pentagon's most important launch and satellite contractors. The report also notes that this news comes three weeks before Tesla's annual meeting on December 3 at Giga Texas. The vote will only cover three issues, primarily re-electing Elon Musk, board chair Robin Denholm, and JB Straubel, and does not include any merger proposals.
Any deal announced in December may require Tesla shareholders to convene a special meeting for a vote.
The two companies have already shared a growing list of projects, including the Terafab semiconductor plant located in Texas. Tesla's next-generation Roadster uses a cooling thruster based on SpaceX hardware, which was showcased last month at SpaceX's headquarters, becoming one of the most visible examples of their overlap.