SpaceX, Tesla merger talks progress toward $3.5T combination

SpaceX and Tesla are progressing in merger negotiations and a deal could be announced as early as December, with special board committees negotiating the structure, governance and share-exchange terms, Bloomberg reported Thursday citing people familiar with the matter. Combined, the two companies are worth roughly $3.5 trillion, enough to make it the largest corporate deal ever.

Both boards formed independent special committees in October to study the combination. Elon Musk, who leads both and owns approximately 20% of Tesla while controlling roughly 85% of SpaceX's voting power through super-voting shares, has stayed out of the room. "Because I'm a conflicted party, I can't actually be in the discussions of the special committees," he said, calling the arrangement "an odd kabuki dance where two groups of people are talking."

The working structure has SpaceX absorbing Tesla. SpaceX is valued over $1.9 trillion following its June IPO; Tesla trades around $1.5 trillion. JPMorgan analysts have flagged "key dynamics that are at odds with each other" between SpaceX's defense work and Tesla's China business. Giga Shanghai alone shipped 67,829 units in October and produces over half of Tesla's vehicles.

Timing is tight. Tesla's December 3 annual meeting has no merger item on the ballot, though shareholders will re-elect Musk, chair Robyn Denholm and JB Straubel through 2029. The announcement could slip into early 2027. Musk, who featured in 45 of our tracked stories over the last 90 days, previously called the merger a "good idea."