SpaceX and Tesla merger talks advance, with a deal possibly announced in December

Talks move toward a combined company

Bloomberg reported on Thursday, 12 November, that talks between SpaceX and Tesla are progressing, citing people familiar with the discussions. The two boards and their advisers are working on price, control and how the combined group would be governed. An announcement could come as soon as December, although a scenario in which it slips into early 2027 has also been discussed. Neither company had answered requests for comment when the reports appeared, and Tesla shares rose as much as 1.9% after the news, according to SAPO.

Estimates of the combined value differ. SpaceX is valued at more than $1.9 trillion and Tesla at about $1.5 trillion, and one estimate puts the combined group above $3 trillion while another cites about $3.5 trillion. The combination would bring together electric vehicles, energy storage, rockets, satellites and artificial intelligence. Earlier this year SpaceX bought xAI for about $250 billion, according to SAPO, while the record for a single transaction has long been Vodafone's 2000 purchase of Mannesmann for $183 billion.

SpaceX1.9

Tesla1.5

SpaceX

1.9 USD trillion

Tesla

1.5 USD trillion

Data from the article text

How the deal took shape

Musk first floated combining the two companies in May, weeks before SpaceX listed its shares in June. In October, Tesla's shareholder documents appeared to prepare the ground, and Musk said both companies had set up special committees of independent directors to weigh a merger. Musk cannot take part in those talks because of a conflict of interest. Ira Ehrenpreis, who chairs Tesla's compensation and governance committees, has sat on SpaceX's board since February. Musk holds about 20% of Tesla but controlled close to 85% of SpaceX's voting rights through high-voting shares.

Shareholder vote and political scrutiny

Tesla's annual shareholder meeting on 3 December will re-elect Musk, board chair Robyn Denholm and JB Straubel, who would serve until 2029. Shareholders will also cast an advisory vote on pay and choose an auditor. Texas Attorney General-elect Nathan Johnson has vowed to take a close look at any merger of the two companies, which are the state's two most valuable companies, and warned about corporate concentration. Democrats now control both houses of Congress and have vowed to investigate Musk's business dealings, which is likely to draw further attention to the deal. The Verge reports that Democratic success in the midterms could also upend the merger, since many candidates campaigned on reining in Musk's corporate empire.

Hurdles and stated rationale

Keeping Tesla's business in China separate from SpaceX's government and defence contracts is one complicating factor, according to The Verge. Musk has linked the merger to a plan for a space-based data centre system called Starmind, powered by built-in solar panels. SpaceX has reportedly ordered 100 gigawatts of solar production equipment from German firm Singulus for about $69 million, and Musk later said the order covers 100GW per year. SpaceX's 2026 SEC filings indicate that reaching that target would require thousands of satellite launches per year, and some skeptics doubt such a system could be run in space at an acceptable cost.

What happens next

Tesla's shareholder meeting on 3 December is the next fixed date in the process. A deal announcement could follow in December, or it could slip into early 2027, according to the people Bloomberg cited. The special committees have not yet agreed on the terms of any transaction and may never do so, so assuming a merger is premature. Musk will stay out of the committees' talks while the boards and advisers work on the structure of the combined company.