SpaceX and Tesla Merger Talks Advance, With a Deal Possible as Soon as December

A merger of Elon Musk's two largest companies would be the biggest acquisition ever. SpaceX has been valued at more than $1.9 trillion since its June listing and Tesla at about $1.5 trillion. The previous record, Vodafone's $183 billion takeover of Mannesmann in 2000, would be dwarfed many times over.

The working structure has SpaceX acquiring Tesla, with Tesla shareholders receiving SpaceX stock, according to the reports. Boards and advisers are now working through price, governance and control. No terms have been agreed and neither company commented.

Tesla shares rose as much as 1.9% after the report, Electrek said.

The Committees Doing the Talking

Both companies formed independent special committees to evaluate a combination, which Musk confirmed on SpaceX's October 20 earnings call. He said then that he was a conflicted party and could not take part in the discussions, and that treating a merger as certain "would be overstating it". A SpaceX filing two days later said no determination had been made.

The companies are already financially linked. Tesla completed a purchase of about $2 billion of SpaceX Class A shares in March, and Ira Ehrenpreis, who chairs Tesla's compensation and governance committees, has sat on SpaceX's board since February. Musk has pointed to possible cooperation in AI, chip design and robotics, and the two already work together on the Terafab chip project. SpaceX bought xAI earlier this year in a deal of roughly $250 billion, and is now planning more than $74 billion of AI supercomputing campuses in Texas and Arizona.

China, Defence and Musk's Pay

Bloomberg identified Tesla's operations in China, SpaceX's US defence work, and shareholder and regulatory approvals as the main hurdles. Giga Shanghai builds more than half of Tesla's cars and shipped 67,829 vehicles in October, according to Electrek. Combining a large Chinese manufacturing base with a major Pentagon contractor raises national-security questions that regulators would have to resolve.

The politics have also shifted. Democrats won control of Congress in last week's midterm elections and have said they will scrutinise Musk's businesses. Bloomberg has previously reported that the companies want to complete a deal before President Donald Trump leaves office.

Governance will draw close attention because Musk owns about 20% of Tesla but controlled roughly 85% of SpaceX's voting power, according to SpaceX's IPO filing. Electrek noted that change-of-control terms in Musk's 2025 Tesla pay award would remove operational milestones and test market-value targets at the deal price, and that 286 million restricted shares from his 2018 package would vest early.

Tesla holds its annual shareholder meeting on December 3 at Giga Texas. The proxy does not include a merger vote, so any deal announced around that date would need a separate shareholder approval later.